Chris’ post about the CFPB’s press release and bulletin encouraging “whistleblowers” to report to the CFPB potential violations of federal consumer financial laws is a reminder to banks and other companies to ensure that they have in place appropriate internal reporting procedures sufficient to encourage employees to use them rather than to report directly to the CFPB.
Just because the CFPB is not encouraging the use of internal reporting does not mean that employers should not encourage the use of such procedures. Many of our clients have developed internal mechanisms for reporting possible violations of federal consumer financial laws, often as part of a larger internal process for reporting potential violations of all types of laws and company rules. However, employers need to periodically remind their employees of the availability of these internal procedures so that employees will be encouraged to exhaust them before reporting to the government.
Our Consumer Financial Services and Labor and Employment Groups have worked with many of our clients in establishing internal procedures for dealing with whistleblower claims. Moreover, if a whistleblower complaint is made (even internally), special attention needs to be paid to the situation to ensure that nothing occurs that could give rise to a claim of retaliation by the employee involved. We do not anticipate a large number of these kinds of whistleblower reports, but each of them should be handled carefully when they do arise.