PART 1075—CONSUMER FINANCIAL CIVIL PENALTY FUND RULE Authority: 12 U.S.C. 5512(b)(1), 5497(d). Source: 78 FR 26501, May 7, 2013, unless otherwise noted. § 1075.100 Scope and purpose. Section 1017(d)(1) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Public Law 111-203, 124 Stat. 1978 (12 U.S.C. 5497(d)) (Dodd-Frank Act) establishes the “Consumer Financial Civil Penalty Fund.” This part describes the conditions under which victims will be eligible for payments from the Consumer Financial Civil Penalty Fund and the amounts of the payments they may receive. This part also establishes procedures and guidelines for allocating funds from the Consumer Financial Civil Penalty Fund to classes of victims and distributing such funds to individual victims, and for allocating funds to consumer education and financial literacy programs. This part also establishes reporting requirements. § 1075.101 Definitions. For the purposes of this part, the following definitions apply: Bureau Bureau enforcement action Chief Financial Officer Civil Penalty Fund Civil Penalty Fund Governance Board Class of victims Defendant Final order Person Redress (1) To distribute, credit, or otherwise pay to those harmed by a violation; or (2) To pay to the Bureau or another intermediary for distribution to those harmed by the violation. Victim Violation § 1075.102 Fund administrator. (a) In general. (b) Powers and duties. (c) Interpretation of these regulations. (2) The Fund Administrator must follow any written directions that the Civil Penalty Fund Governance Board provides pursuant to paragraph (c)(1) of this section. (d) Unavailability of the Fund Administrator. § 1075.103 Eligible victims. 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. § 1075.104 Payments to victims. (a) In general. (b) Victims' uncompensated harm. (2) For purposes of paragraph (b)(1) of this section, a victim has received or is reasonably expected to receive compensation in the amount of: (i) Any Civil Penalty Fund payment that the victim has previously received or will receive as a result of a previous allocation from the Civil Penalty Fund to the victim's class; (ii) Any redress that a final order in a Bureau enforcement action orders to be distributed, credited, or otherwise paid to the victim, and that has not been suspended or waived and that the Chief Financial Officer has not determined to be uncollectible; and (iii) Any other redress that the Bureau knows that has been distributed, credited, or otherwise paid to the victim, or has been paid to an intermediary for distribution to the victim, to the extent that: (A) That redress compensates the victim for the same harm as would be compensated by a Civil Penalty Fund payment; and (B) It is not unduly burdensome, in light of the amounts at stake, to determine the amount of that redress or the extent to which it compensates the victim for the same harm as would be compensated by a Civil Penalty Fund payment. (3) If the Fund Administrator deems it impracticable to assess the uncompensated harm of individual victims in a class, each individual victim's uncompensated harm will be the victim's share of the aggregate uncompensated harm of the victim's class. (c) Victims' compensable harm. (1) If a final order in a Bureau enforcement action ordered redress for a class of victims, the compensable harm of each victim in the class is equal to that victim's share of the total redress ordered, including any amounts that are suspended or waived. (2) If a final order in a Bureau enforcement action does not order redress for a class of victims, those victims' compensable harm is as follows: (i) If the Bureau sought redress for a class of victims but a court or administrative tribunal denied that request for redress in the final order, the victims in that class have no compensable harm. (ii) Except as provided in paragraph (c)(2)(i) of this section, if the final order in the Bureau enforcement action specifies the amount of the victims' harm, including by prescribing a formula for calculating that harm, each victim's compensable harm is equal to that victim's share of the amount specified. (iii) Except as provided in paragraph (c)(2)(i) of this section, if the final order in the Bureau enforcement action does not specify the amount of the victims' harm, each victim's compensable harm is equal to the victim's out-of-pocket losses that resulted from the violation or violations for which a civil penalty was imposed, except to the extent such losses are impracticable to determine. § 1075.105 Allocating funds from the Civil Penalty Fund—in general. (a) In general. (b) Schedule for making allocations. www.consumerfinance.gov (i) The schedule will establish six-month periods and identify the start and end dates of those periods. The start date of one period will be the day immediately after the end date of the preceding period. (ii) Notwithstanding paragraph (b)(1)(i) of this section, the first and second periods may be longer or shorter than six months to allow future six-month periods to start and end on dates that better serve administrative efficiency. The first and second periods will constitute “six-month periods” under this part regardless of their actual length. (iii) The start date of the first period is July 21, 2011. (2) Within 60 days after the end of a six-month period, the Fund Administrator will allocate available funds in the Civil Penalty Fund in accordance with §§ 1075.106 and 1075.107. (3) If the Civil Penalty Fund Governance Board determines that the schedule established under paragraph (b)(1) of this section should be changed to better serve administrative efficiency, it may change that schedule by directing the Fund Administrator to publish the new schedule on www.consumerfinance.gov. (c) Funds available for allocation. (1) Any funds already allocated, (2) Any funds that the Fund Administrator determines are necessary for authorized administrative expenses, and (3) Any funds collected pursuant to an order that has not yet become a final order. § 1075.106 Allocating funds to classes of victims. (a) Allocations when there are sufficient funds available to compensate all uncompensated harm. (b) Allocations when there are insufficient funds available to compensate all uncompensated harm. (1) Priority to classes of victims from the most recent six-month period. (2) Assigning classes of victims to a six-month period. (i) If redress was ordered for a class of victims in a Bureau enforcement action but suspended or waived in whole or in part, the class of victims first had uncompensated harm as described in § 1075.104(b) on the date the suspension or waiver became effective. (ii) If redress was ordered for a class of victims in a Bureau enforcement action but determined by the Chief Financial Officer to be uncollectible in whole or in part, the class of victims first had uncompensated harm as described in § 1075.104(b) on the date the Chief Financial Officer made that determination. (iii) If no redress was ordered for a class of victims in a Bureau enforcement action, the class of victims first had uncompensated harm as described in § 1075.104(b) on the date the order imposing a civil penalty became a final order. (c) No allocation to a class of victims if making payments would be impracticable. (d) Fund Administrator's discretion. (2) If, in allocating funds during a given time period described in § 1075.105(b)(2), the Fund Administrator exercises her discretion under paragraph (d)(1) of this section, she may allocate funds to consumer education and financial literacy programs under 1075.107 during that time period only to the same extent she could have absent that exercise of discretion. § 1075.107 Allocating funds to consumer education and financial literacy programs. (a) If funds available under § 1075.105(c) remain after the Fund Administrator allocates funds as described in § 1075.106(a), the Fund Administrator may allocate those remaining funds for consumer education and financial literacy programs. (b) The Fund Administrator shall not have the authority to allocate funds to particular consumer education or financial literacy programs or otherwise to select the particular consumer education or financial literacy programs for which allocated funds will be used. § 1075.108 Distributing payments to victims. (a) Designation of a payments administrator. (b) Distribution plan. (c) Contents of plan. (1) Procedures for determining the amount each victim will receive. Such procedures may, but need not, include a process for submitting and approving claims. (2) Procedures for locating and notifying victims eligible or potentially eligible for payment. (3) The method or methods by which the payments will be made. (4) The method or methods by which potentially eligible victims may contact the payments administrator. (5) Any other provisions that the Fund Administrator deems appropriate. (d) Distribution of payments. (e) Disposition of funds remaining after attempted distribution to a class of victims. (1) To the extent practicable, the payments administrator will distribute those remaining funds to victims in that class up to the amount of their remaining uncompensated harm as described in § 1075.104(b). (2) Any remaining funds that cannot be distributed pursuant to paragraph (e)(1) of this section will be returned to the Civil Penalty Fund. § 1075.109 When payments to victims are impracticable. (a) Individual payments. (1) The payment to the victim would be of such a small amount that the victim would not be likely to redeem the payment; (2) The payment to the victim is too small to justify the cost of locating the victim and making the payment; (3) The victim cannot be located with effort that is reasonable in light of the amount of the payment; (4) The victim does not timely submit information that a distribution plan requires to be submitted before a payment will be made; (5) The victim does not redeem the payment within a reasonable time; or (6) The Fund Administrator determines that other circumstances make it unreasonable to make a payment to the victim. (b) Payments to a class of victims. (1) The expected aggregate actual payment to the class of victims is too small to justify the costs of locating the victims in the class and making payments to them; (2) It would be impracticable under paragraph (a) of this section to make a payment to any victim in the class; or (3) The Fund Administrator determines that other circumstances make it unreasonable to make payments to the class. § 1075.110 Reporting requirements. The Fund Administrator must issue regular reports, on at least an annual basis, that describe how funds in the Civil Penalty Fund have been allocated, the basis for those allocations, and how funds that have been allocated to classes of victims have been distributed. These reports will be made available on www.consumerfinance.gov.