CFPB Issues Whistleblowing Circular

In a sign that the Consumer Financial Protection Bureau is not going to let the Supreme Court’s Loper Bright decision deter it from continuing to aggressively interpret its statutory mandate, it recently issued this industry circular to:?

remind regulators and the public that covered persons who in certain circumstances require their employees to enter into broad confidentiality agreements that do not clearly permit communications with government enforcement agencies or cooperation with law enforcement investigations risk violating the CFPA’s [Consumer Finance Protection Act] prohibition of discrimination against whistleblowers and undermining the government’s ability to enforce the law.

To what exactly is the CFPB referring? 12 USCA 5567 protects employees who help provide consumer products and services from being threatened or disciplined for reporting potential violations of the law. With this circular, the CFPB underscores that non-disclosure agreements can run afoul of this prohibition if they suggest that employees may be sued for engaging in whistleblowing activity. This may be an issue you may want your HR attorney to review next time you review your employee handbook.?

?While the legislation clearly protects whistleblowers, it is not at all clear how much authority the CFPB has to opine on this issue. Under federal law, the U.S. Department of Labor , working through #OSHA, is given the responsibility to investigate complaints under this statute (see generally?Childs v. Sente Mortg., Inc., No. 3:16-CV-2131-L-BN, 2016 WL 5794961, at *2 (N.D. Tex. Aug. 23, 2016),?report and recommendation adopted,?No. 3:16-CV-2131-L, 2016 WL 5791624 (N.D. Tex. Oct. 4, 2016)). In this circular, the Bureau implicitly argues that it has the authority to investigate whistleblower claims even though the statute specifically names the Department of Labor as the primary enforcer in this area.?

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