WASHINGTON–The CFPB is being urged by America’s Credit Unions to reconsider its proposal to remove consumer education and financial literacy from the Civil Penalty Fund’s authorized uses.
In a letter to the Bureau, ACU’s head of regulatory advocacy, James Akin, responded to the CFBP’s proposal to amend the 2013 rule establishing the Consumer Financial Civil Penalty Fund to remove references to allocating funds to consumer education and financial literacy programs.
“America’s Credit Unions supports establishing robust guardrails that keep victim restitution paramount while permitting carefully circumscribed education spending that demonstrably improves consumer outcomes,” the letter states, adding several specific examples of how education prevents fraud and scams, informs borrowing and saving, and empowers communities.
The Guardrails
According to America’s Credit Unions, such guardrails could include:
- A cap tying education disbursements to a fixed percentage of each allocation after full victim compensation
- A transparent, evidence-based rubric for selecting grantees and measuring results
- Public disclosure of allocation rationales and outcomes
- Periodic independent audits and Government Accountability Office follow-up
- Formal notification to Congress of any planned education grants.
Preserves Flexibility
“These kinds of reforms would preserve the Bureau’s flexibility to respond to emerging consumer literacy gaps, like a sudden spike in ID theft scams or a new financial product confusing consumers, while assuring that enforcement is never driven by anything other than consumer protection,” the letter added.
