GAO: CFPB’s Civil Penalty Fund needs additional oversight

cfpbA recent report from the Government Accountability Office (GAO) on the CFPB’s Civil Penalty Fund found that while the agency has implemented a number of internal controls, more needs to be done to document transactions originated in the fund.

Civil penalties levied by the CFPB are placed into the fund to compensate potential eligible victims or abusive or illegal schemes and may also be used to fund consumer education and financial literacy programs.

According to the GAO, the CFPB has implemented controls to track the collection of penalty funds and written policies to describe the process of allocation but has not documented how funds were allocated.

“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,” the report said. “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.”

The GAO said documenting factors considered in the allocation of funds would enhance the transparency of such decisions and “help to ensure that future allocation decisions are made in a consistent manner.”

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