The Consumer Financial Protection Bureau (CFPB) Acting Director Russell Vought has announced a proposed rule to limit the agency’s use of its civil penalty fund, narrowing its scope strictly to direct compensation for harmed consumers. This move is part of a broader effort to enhance accountability and transparency within the agency’s enforcement framework.
The proposal, officially posted Tuesday and set for publication in the Federal Register on Wednesday, seeks to roll back parts of a 2013 rule that allowed the CFPB to use civil penalty funds not only for victim compensation but also for consumer education and financial literacy initiatives in cases where direct redress was not feasible.
Vought’s notice emphasizes concerns over the CFPB’s discretion in allocating these education funds, stating the current rule lacks “adequate guardrails” and may incentivize enforcement actions to expand the agency’s operational reach. Under the proposed changes, references to alternative uses—such as financial education—would be removed entirely.
Since the fund’s creation under the 2010 Dodd-Frank Act, the CFPB has disbursed over $3.6 billion in victim compensation, while allocating only $28.8 million—less than 1%—toward educational programs. These allocations have occurred in just two fiscal years (2013 and 2016), supporting initiatives like financial coaching for returning servicemembers and vulnerable consumers.
This proposed rollback reflects growing scrutiny from conservative policymakers and aligns with recommendations in Project 2025, a policy blueprint co-authored by Vought. The blueprint characterizes the fund’s discretionary use as a potential channel for politically motivated spending and urges that unclaimed funds be returned to the U.S. Treasury.
Public comments on the proposed CFPB Vought civil penalty fund limit will be accepted for 30 days following the rule’s formal publication.
In addition to this notice, the CFPB also released two other proposed regulatory changes:
