{"id":9834,"date":"2026-02-18T04:01:35","date_gmt":"2026-02-18T04:01:35","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/cfpb-issues-guidance-on-whistleblower-rights-under-the-consumer-financial-protection-act\/"},"modified":"2026-02-18T04:01:35","modified_gmt":"2026-02-18T04:01:35","slug":"cfpb-issues-guidance-on-whistleblower-rights-under-the-consumer-financial-protection-act","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/cfpb-issues-guidance-on-whistleblower-rights-under-the-consumer-financial-protection-act\/","title":{"rendered":"CFPB Issues Guidance on Whistleblower Rights Under the Consumer Financial Protection Act"},"content":{"rendered":"\n<div id=\"contentSummaryCollapse\" style=\"--intro-p-height: 10.3125rem;\">\n<div class=\"inner-collapse\">\n<p>The Consumer Financial Protection Bureau recently released guidance warning that overly broad confidentiality agreements with employees may violate Section\u00a01057 of the Consumer Financial Protection Act, because the use of such agreements may constitute prohibited discrimination against employees who have, or could, engage in whistleblowing.<\/p>\n<p align=\"center\">*\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 *\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 *<\/p>\n<p>On July 24, 2024, the Consumer Financial Protection Bureau (\u201cCFPB\u201d) issued <a href=\"https:\/\/www.consumerfinance.gov\/compliance\/circulars\/consumer-financial-protection-circular-2024-04\/\" target=\"_blank\" rel=\"nofollow noopener\">Circular 2024-04<\/a>, which provides that confidentiality agreements issued by \u201ccovered persons\u201d should not:<\/p>\n<ul>\n<li>\u201c[L]imit the ability of employees to communicate with government enforcement agencies or speak freely with investigators\u201d;<\/li>\n<li>Imply \u201cthat the employer may file a lawsuit or reserve[] the right to take adverse employment action upon the employee\u2019s violation of the agreement,\u201d such that \u201can employee may interpret such conditions as threats to retaliate for engaging in whistleblowing activity\u201d; or<\/li>\n<li>Impose confidentiality terms \u201cin situations that are particularly likely to lead a reasonable employee to perceive the required entry into the agreement as a threat, such as in the context of an internal investigation or other scenario involving potential violations of law\u2014for example, after the uncovering of suspected or confirmed wrongdoing, or in the aftermath of a potentially embarrassing episode for a company.\u201d<\/li>\n<\/ul>\n<p>The Consumer Financial Protection Act defines \u201ccovered persons\u201d as those who offer or provide a consumer financial product or service, and certain of their affiliates.<\/p>\n<p>In support of this directive, the CFPB relied on Section 1057, an anti-retaliation statute that prohibits \u201cterminat[ing] or in any other way discriminat[ing] against\u201d covered employees who have (i)\u00a0provided, or will provide, \u201cinformation to the employer, the [CFPB], or any other State, local, or Federal, government authority or law enforcement agency relating to any violation of, or any act or omission that the employee reasonably believes to be a violation of\u201d the laws subject to the CFPB\u2019s jurisdiction; (ii)\u00a0testified, or will testify, \u201cin any proceeding\u201d related to alleged violations of the Consumer Financial Protection Act or the CFPB\u2019s rules; (iii)\u00a0initiated a proceeding \u201cunder any Federal consumer financial law\u201d; or (iv)\u00a0objected to or refused to participate in an activity the employee \u201creasonably believed to be in violation of any law, rule, order, standard, or prohibition\u201d enforceable by the CFPB.<\/p>\n<p>In relying on this statute, the CFPB reasoned in part that the use of the term \u201cdiscriminate\u201d in the statute \u201cis broad and encompasses a variety of adverse actions that a covered person may take against covered employees.\u201d Notably, the Circular states that an agreement that permits the sharing of information \u201cto the extent permitted by law\u201d may technically permit whistleblowing, but still may \u201cthreaten[]\u201d an employee \u201cwho may not know that the law forbids restrictions on whistleblowing.\u201d The Circular advises employers that they \u201ccan significantly reduce the risk of this kind of perception\u2014and thus of violating Section 1057\u2014by ensuring that [their] agreements expressly permit employees to communicate freely with government enforcement agencies and to cooperate in government investigations.\u201d<\/p>\n<p>The Circular follows increased enforcement activity by the CFTC and SEC in connection with employment agreements that impeded whistleblowing. Our blog post addressing the first CFTC enforcement action under the CFTC whistleblower protection rule is available here, and our recent discussion of SEC enforcement activity under its whistleblower protection rule is available here.<\/p>\n<\/p><\/div>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Consumer Financial Protection Bureau recently released guidance warning that overly broad confidentiality agreements with employees may violate Section\u00a01057 of the Consumer Financial Protection Act, because the use [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":9835,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[911,6109,2810,212,3798,2684,2811,408,997],"class_list":["post-9834","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lawyers","tag-act","tag-cfpb","tag-consumer","tag-financial","tag-guidance","tag-issues","tag-protection","tag-rights","tag-whistleblower"],"_links":{"self":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/9834","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/comments?post=9834"}],"version-history":[{"count":0,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/9834\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media\/9835"}],"wp:attachment":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media?parent=9834"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/categories?post=9834"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/tags?post=9834"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}