What Congress needs to include for the next economic relief legislation

What Congress needs to include for the next economic relief legislation
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The coronavirus pandemic has had a devastating impact on our lives, our work, and our communities. Policymakers have rightly focused on public health needs and minimizing the economic blow of this crisis by sending Americans stimulus payments and starting the new Paycheck Protection Program. These need to be the priorities for the government.

We also know that when an emergency hits, bad actors are more active in their seeking to take advantage of consumers. At the Consumer Financial Protection Bureau, our staff has been working harder than ever to ensure that we prevent harm from taking place as well as to protect consumers when bad actors break the law. In order to stay ahead of bad actors that are seeking to take advantage of consumers, Congress needs to provide our agency with the authority to compensate whistleblowers.

In response to the 2008 financial crisis, Congress provided the Securities and Exchange Commission with a similar authority. The agency used this authority successfully to obtain information and to prosecute companies. Whistleblowers are only compensated if their information culminates in a successful enforcement action. The amount of the award is calculated as a percentage of monetary sanctions collected in the action.

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If given this authority, I believe the Consumer Financial Protection Bureau can also obtain quality information from whistleblowers that could enable us to take swift actions against companies for violating the law. There are many employees at companies engaged in wrongdoing who are reluctant to come forward due to fears of retaliation. But having strong protections and compensation in place can incentivize these employees to reach out to regulators to report wrongdoing. It is the least we can do to encourage employees to do the right thing and stand up to companies.

The Consumer Financial Protection Bureau has seen that whistleblowers can be key sources of information in its enforcement of fair lending laws in particular. While discriminatory policies can be hard to uncover in an examination or investigation, having an employee come forward to talk about how the company violates fair lending laws is helpful.

Moreover, consumers are not always aware that they have been harmed by discriminatory practices or actions. Having the whistleblower reward program can encourage employees to report and reveal discriminatory practices. This is even more important today while consumers are now seeking access to credit and tracking every dollar they have.

All through the coronavirus pandemic, our staff at the Consumer Financial Protection Bureau has remained active in its supervisory and enforcement work to defend Americans. We do not hesitate to take public enforcement action against companies or individuals that engage in unfair and abusive acts or practices or otherwise violate consumer financial laws.

The nation confronts challenging times. Policymakers should continue to work together on solutions to improve the prospects of all Americans. By including a whistleblower protection and compensation program for the Consumer Financial Protection Bureau in the next relief bill, Congress will give us the authority that other regulators have to encourage employees to help us prosecute wrongdoing. I am ready to work with policymakers on both sides of the aisle to add this mandate in the next round.

Kathy Kraninger is director of the Consumer Financial Protection Bureau.