The Consumer Financial Protection Bureau filed a lawsuit against an Illinois bank for engaging in the same practices that whistleblowers exposed at Wells Fargo last year—practices that would be eligible for whistleblower rewards under the Bureau’s proposed law.
In the lawsuit filed March 9 against Fifth Third Bank, the Bureau alleges employees at the bank opened accounts, services, and lines of credit in consumers’ names without their knowledge or consent. Bank leaders allegedly knew about the fraud but did nothing to prevent it.
The charges are similar to those Wells Fargo admitted to in 2016, which also arose from unreasonable sales targets that created incentives for employees to break the law. The Bureau ultimately fined Wells Fargo more than $1 billion for the crimes, which were brought to light by whistleblowers.
The Bureau, created by the Consumer Financial Protection Act of 2010 in the wake of the 2008 financial crisis, announced three new anti-fraud initiatives on March 6, of which creating a whistleblower office is one. The other initiatives are a regulatory advisory program for companies and reissuing a program to provide credit for companies with a track record of good behavior.
Though the Act that created the Bureau includes a provision protecting whistleblowers against retaliation for reporting financial fraud, the new language would allow awards to whistleblowers, along the same lines as the Securities and Exchange Commission’s whistleblower program. The Bureau has sent legislative language to House Speaker Nancy Pelosi’s office outlining the program, which would allow whistleblowers to collect 10 to 30 percent of imposed penalties over $1 million.