12 U.S.C. § 5565: Relief available

Summary

Courts and the Consumer Financial Protection Bureau can order fixes when someone breaks federal consumer finance rules. They can undo or change contracts, give refunds or return property, require repayment to consumers, force companies to give up unfair gains, order money damages, require public notice and pay for that notice, limit a person’s business activities, and impose civil money penalties. They may not award punitive damages. If the Bureau, a State attorney general, or a State regulator wins a case, it can recover costs of bringing the case. Anyone who violates the rules must pay civil penalties. Penalties are charged per day: up to $5,000 per day for ordinary violations, up to $25,000 per day for reckless violations, and up to $1,000,000 per day for knowing violations. The size of any fine must reflect the person’s resources, seriousness of the harm, consumer losses or risks (including how many products were involved), past violations, and other fair factors. The Bureau can reduce or cancel a penalty. A penalty cannot be imposed until the person gets notice and a chance for a hearing, or a court has entered judgment for the Bureau.

Title 12, §5565

Banks and Banking, Source: USLM XML via OLRC

(a)Administrative proceedings or court actions

(1)Jurisdiction

The court (or the Bureau, as the case may be) in an action or adjudication proceeding brought under Federal consumer financial law, shall have jurisdiction to grant any appropriate legal or equitable relief with respect to a violation of Federal consumer financial law, including a violation of a rule or order prescribed under a Federal consumer financial law.

(2)Relief

Relief under this section may include, without limitation—

(A)rescission or reformation of contracts;

(B)refund of moneys or return of real property;

(C)restitution;

(D)disgorgement or compensation for unjust enrichment;

(E)payment of damages or other monetary relief;

(F)public notification regarding the violation, including the costs of notification;

(G)limits on the activities or functions of the person; and

(H)civil money penalties, as set forth more fully in subsection (c).

(3)No exemplary or punitive damages

Nothing in this subsection shall be construed as authorizing the imposition of exemplary or punitive damages.

(b)Recovery of costs

In any action brought by the Bureau, a State attorney general, or any State regulator to enforce any Federal consumer financial law, the Bureau, the State attorney general, or the State regulator may recover its costs in connection with prosecuting such action if the Bureau, the State attorney general, or the State regulator is the prevailing party in the action.

(c)Civil money penalty in court and administrative actions

(1)In general

Any person that violates, through any act or omission, any provision of Federal consumer financial law shall forfeit and pay a civil penalty pursuant to this subsection.

(2)Penalty amounts

(A)First tier

For any violation of a law, rule, or final order or condition imposed in writing by the Bureau, a civil penalty may not exceed $5,000 for each day during which such violation or failure to pay continues.

(B)Second tier

Notwithstanding paragraph (A), for any person that recklessly engages in a violation of a Federal consumer financial law, a civil penalty may not exceed $25,000 for each day during which such violation continues.

(C)Third tier

Notwithstanding subparagraphs (A) and (B), for any person that knowingly violates a Federal consumer financial law, a civil penalty may not exceed $1,000,000 for each day during which such violation continues.

(3)Mitigating factors

In determining the amount of any penalty assessed under paragraph (2), the Bureau or the court shall take into account the appropriateness of the penalty with respect to—

(A)the size of financial resources and good faith of the person charged;

(B)the gravity of the violation or failure to pay;

(C)the severity of the risks to or losses of the consumer, which may take into account the number of products or services sold or provided;

(D)the history of previous violations; and

(E)such other matters as justice may require.

(4)Authority to modify or remit penalty

The Bureau may compromise, modify, or remit any penalty which may be assessed or had already been assessed under paragraph (2). The amount of such penalty, when finally determined, shall be exclusive of any sums owed by the person to the United States in connection with the costs of the proceeding, and may be deducted from any sums owing by the United States to the person charged.

(5)Notice and hearing

No civil penalty may be assessed under this subsection with respect to a violation of any Federal consumer financial law, unless—

(A)the Bureau gives notice and an opportunity for a hearing to the person accused of the violation; or

(B)the appropriate court has ordered such assessment and entered judgment in favor of the Bureau.

Statutory Notes and Related Subsidiaries

Effective Date

Section effective on the designated transfer date, see section 1058 of Pub. L. 111–203, set out as a note under section 5561 of this title.

§5565 Relief Available

Summary

Title 12, §5565

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Effective Date

Citations & Metadata