Payments to harmed consumers
Congress has authorized the CFPB to take legal action against companies and people that violate federal consumer financial law.
When the Bureau enforces the law, it or a court may order the violator to take action to remedy the harm it caused consumers. This can include requiring the person or company to compensate its victims for this harm. This compensation is generally called “redress.” In some cases, when the available redress is insufficient to fully compensate consumers for the harm they have suffered, the Bureau may compensate victims from the Bureau’s Civil Penalty Fund. The money in the Civil Penalty Fund comes from penalties that the Bureau obtains in enforcement actions against entities and individuals who have violated the law.
Payments by case
Payments to harmed consumers can be made when the Bureau or court orders a company that has violated a consumer financial protection law to pay an amount of money to compensate the consumers’ harm. This money is distributed to victims either by the Bureau, directly by the violator, or through a third-party administrator.
Civil Penalty Fund
When violators of consumer financial protection law pay a penalty to the Bureau, those funds are deposited into the Civil Penalty Fund. The money in that Fund can then be used to compensate eligible victims. When payments to victims aren’t feasible, or if all eligible victims have been fully compensated, the Bureau may use Civil Penalty Fund money for consumer education and financial literacy programs.