WASHINGTON (CN) - The Consumer Financial Protection Bureau issued two regulations relating to how civil penalty money should be distributed to victims of consumer financial fraud.
Part of the Dodd-Frank Wall Street Reform and Consumer Protection Act authorizes the government to enforce federal consumer financial law through legal actions and administrative proceedings.
This week the bureau published a final rule specifying the conditions under which victims of financial fraud will be eligible for payment from a civil penalty fund.
The rule also lays out procedures the bureau says it will follow to allocate and distribute the money to victims.
The bureau said it would only use money from its civil penalty fund to compensate for money that victims lost and could not recover.
Under the rule, "a victim is eligible for payment from the Civil Penalty Fund if a final order in a bureau enforcement action imposed a civil penalty for the violation or violations that harmed the victim," the bureau wrote.
The bureau also said it will establish a two-stage procedure to allocate money to consumer education and financial literacy programs, where appropriate.
Under the rule, an administrator would allocate amounts of money to different classes of victims, among other things.
In addition to the final rule, the bureau published a related proposed rule that requests comments on possible revisions to the penalty procedure.
Among other things, the bureau requests comments about how it should identify the "activities" that give rise to penalties imposed on financial institutions, and how it should identify victims.
Comments on the proposed rule are due by July 8.
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