CFPB headquarters in Washington, D.C. Credit/Shutterstock
The CFPB is preparing to implement a new policy on how it refers potential criminal violations to the U.S. Department of Justice, a move that could have significant compliance implications for credit unions and other financial institutions.
The policy statement, published in the Federal Register on Friday, came in response to President Trump’s Executive Order 14294, Fighting Overcriminalization in Federal Regulations. It directed federal agencies to clearly outline how they handle regulatory offenses that carry criminal penalties.
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While the CFPB’s primary role is civil enforcement, several consumer protection laws under its jurisdiction, such as the Truth in Lending Act (TILA) and the Electronic Fund Transfer Act (EFTA), have included criminal provisions for willful violations. For example, knowingly providing false disclosures under TILA can result in fines of up to $5,000 or imprisonment for up to one year.
The CFPB said it would consider several factors before referring cases to the Department of Justice, including the financial harm caused, the offender’s potential gain, whether the individual had specialized knowledge or licenses, and whether there is evidence the person knew the conduct was unlawful.
For credit unions, the policy signaled that inadvertent compliance failures are unlikely to rise to the level of criminal referrals, but willful misconduct could. The CFPB also plans to publish, within a year, a comprehensive list of all its regulations that include criminal penalties, alongside a review of whether existing intent standards are appropriate.
Future rulemakings will explicitly state when a rule carries criminal penalties and detail the mental intent standard required for prosecution, adding a new layer of clarity but also scrutiny for credit unions navigating complex regulations.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
