Kathy Kraninger, the director of the U.S. Consumer Financial Protection Bureau (CFPB), has asked Congress for the ability to pay whistleblowers in an attempt to incentivize them to speak out, according to a report by Reuters.
The authority would require a change in legislation, but Kraninger argues that it would help the agency spot wrongdoing more quickly, especially when it comes to fair lending practices. Whistleblowers would only be paid if their tips led to penalties against perpetrators.
“We want to incentivize whistleblowers to contact us if they believe their employer is not complying with the law,” the agency said.
Lately, the CFPB has gotten backlash for bringing in fewer enforcement cases, but there is a very low expectation for legislation during the election year.
The CFPB, which was created in 2010 as part of the Dodd-Frank financial reform legislation, has the power to petition whistleblowers to speak out, but does not currently have the capability to pay them for their tipoffs.
According to the report, the CFPB also said it will create an “advisory opinion program” that would enable firms to ask the agency compliance questions. The program would make it easier for companies to keep track of and comply with finance laws, and the agency would publish responses so that other companies could see them.
Recently, the Supreme Court heard arguments regarding the Bureau – specifically whether the president has the authority to fire its leader. The court heard testimony about how the organization was structured, and how the justices’ votes will likely have a big impact on the CFPB moving forward.
The Dodd-Frank Act contained a provision that the agency’s director can only be fired for cause. The court seemed to be leaning toward the removal of any restriction.
Justice Brett Kavanaugh said that because the CFPB chief serves for five years, the new president should be able to fire a director that was appointed to the position in a prior administration.
“It’s really the next president who’s going to face the issue,” he said, adding that an incoming president and a CFPB director could have “a completely different conception of consumer financial regulatory issues.”