Consumer Financial Protection Bureau: Opportunity Exists to Improve Transparency of Civil Penalty Fund Activities, Chairwoman, Subcommittee on Financial Institutions and Consumer Credit, Committee on Financial Services, House of Representatives   [open pdf - 788KB]

From the Document: "The Bureau of Consumer Financial Protection, also known as the Consumer Financial Protection Bureau (CFPB), has developed a process for administering the Consumer Financial Civil Penalty Fund (Civil Penalty Fund). CFPB deposits collected civil money penalties into the fund to compensate eligible victims and may also use the fund for the purpose of consumer education and financial literacy programs. CFPB has implemented a number of internal controls for managing the fund. For example, CFPB has segregated key duties and responsibilities among staff, which is consistent with internal controls for reducing the risk of management error or fraud. CFPB has also implemented controls for tracking the collection of penalty funds, determining the allocation amount to classes of eligible victims, and monitoring the third-party vendors that distribute the funds. For example, in CFPB's Civil Penalty Fund Rule, the agency outlines a 6-month allocation schedule, which establishes a timeline for funds to be pooled and distributed. In addition, CFPB has written policies that describe roles and the process related to making allocations to consumer education and financial literacy programs. However, according to officials, CFPB did not document the factors the Fund Administrator considered in determining the allocation of funds for consumer education and financial literacy programs for the first allocation period. Federal internal control standards state that it is important to document significant events clearly and completely and to promptly record transactions and other significant events. Documenting the specific factors the Fund Administrator considers each time funds are allocated would make such decisions more transparent and would help to ensure that future allocation decisions are made in a consistent manner."

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Government Accountability Office: http://www.gao.gov/
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