Difference between revisions of "Whistleblower Protection Laws"

Line 454: Line 454:

='''Consumer Financial Protection Act'''=
='''Consumer Financial Protection Act'''=
The anti-retaliation provision of the '''Consumer Financial Protection Act''' provides a cause of action for corporate whistleblowers who suffer retaliation for raising concerns about potential violations of rules or regulations of the Consumer Financial Protection Bureau.
OSHA has issued [https://www.federalregister.gov/documents/2016/03/17/2016-05415/procedures-for-handling-retaliation-complaints-under-the-employee-protection-provision-of-the final rules implementing the whistleblower protection provision of the Consumer Financial Protection Act] (CFPA).  Enacted as Section 1057 of the Dodd-Frank Act, the CFPA’s whistleblower protection provision provides robust protection to employees who disclose fraud related to consumer financial protection services.
The [https://www.zuckermanlaw.com/legal-services/sarbanes-oxley-whistleblower/ whistleblower protection provisions of the Sarbanes-Oxley Act] also provides strong protection for whistleblowers.  Click [https://www.zuckermanlaw.com/wp-content/uploads/2017/07/Sarbanes-Oxley-Whistleblower-Protection-Robust-Protection-for-Corporate-Whistleblowers.pdf here] to download a helpful guide to the Sarbanes-Oxley whistleblower protection law.
=='''Banking Industry Employees Protected by the Consumer Financial Protection Whistleblower Law'''==
The term “covered employee” means “any individual performing tasks related to the offering or provision of a consumer financial product or service.”  The CFPA defines a “consumer financial product or service” to include “a wide variety of financial products or services offered or provided for use by consumers primarily for personal, family, or household purposes, and certain financial products or services that are delivered, offered, or provided in connection with a consumer financial product or service . . . Examples of these include . .. residential mortgage origination, lending, brokerage and servicing, and related products and services such as mortgage loan modification and foreclosure relief; student loans; payday loans; and other financial services such as debt collection, credit reporting, credit cards and related activities, money transmitting, check cashing and related activities, prepaid cards, and debt relief services.”
Recently the Fifth Circuit Court of Appeals held in [https://www.ca5.uscourts.gov/opinions/pub/17/17-20029-CV0.pdf ''Calderone v. Sonic Houston JLR, L.P''] that the CFPA does not protect employees of auto dealers.
=='''Scope of Protected Whistleblowing About Consumer Financial Protection Violations'''==
The CFPA protects disclosures made to an employer, to the Consumer Financial Protection Bureau or any State, local, or Federal, government authority or law enforcement agency concerning any act or omission that the employee reasonably believes to be a violation of any CFPB regulation or any other consumer financial protection law that the Bureau enforces. This includes several federal laws regulating “unfair, deceptive, or abusive practices . . . related to the provision of consumer financial products or services.”
Some of the matters the CFPB regulates include:
*kickbacks paid to mortgage issuers or insurers;
*deceptive advertising;
*discriminatory lending practices, including a violation of the Equal Credit Opportunity Act (“ECOA”);
excessive fees;
*any false, deceptive, or misleading representation or means in connection with the collection of any debt; and
debt collection activities that violate the Fair Debt Collection Practices Act (FDCPA).
The ECOA prohibits creditors from discriminating against “any applicant, with respect to any aspect of a credit transaction—on the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract).”  15 U.S.C. § 1691(a)(1).
CFPA protected conduct includes disclosures concerning:
*Loan fraud – Where the plaintiff banker reported a fellow banker for preparing a loan for disbursement without providing the borrower three days to rescind their decision to borrow as required by state and federal consumer protection statutes, the District Court for the Southern District of West Virginia held this could be protected activity. ''Vaghela v. Huntington Bancshares, Inc.'', 2018 WL 2014087 (S.D. W.Va. Apr. 30, 2018).
*Mortgage overbilling – Where the plaintiff mortgage attorney reported what he believed to be a widespread practice of significant overbilling of mortgage loans by a mortgage foreclosure firm, the District Court for the District of Maryland held that this could be protected. ''Yoder v. O’Neil Group, LLC'', 2017 WL 6206074 (D. Md. Dec. 8, 2017).
*Banking fraud – Where former bank employees alleged termination for reporting fraudulent sales practices that they alleged were violations of the Truth in Lending Act, the Home Ownership Equity Protection Act, and the Real Estate and Settlement Procedures Act, the District Court for the Northern District of Illinois held reporting violations of any of these statutes would be protected activity and retaliatory termination for objecting to these violations would violate the CFPA. ''Lysik v. Citibank, N.A.'', 2017 WL 4164037 (N.D. Ill. Sep. 20, 2017).
*Lapses in bank management and judgment – Where a bank’s treasurer and chief financial officer uncovered and reported serious mismanagement of a bank and its funds, including the bank’s president using the business credit card for personal expenses and engaging in pattern of unusual check cashing by cashing checks by placing holds on employee accounts, the District Court for the District of Massachusetts held this could constitute protected activity. ''Becotte v. Cooperative Bank'', 2017 WL 886967 (D. Mass. Mar. 6, 2017).
While the CFPB’s whistleblower protections are relatively broad, simply asking questions about alleged violations of banking laws will generally not constitute protected conduct. The Sixth Circuit Court of Appeals has held that where a mortgage loan originator had a conversation with his employer bank’s mortgage compliance department about the obligation to mail out adverse action notices informing mortgage loan applicants that they had been denied loans and liability for failure to do so, he did not engage in protected activity. The court held the plaintiff-employee did not engage in protected activity because he did not object to the unlawful practice and instead only asked questions confirming and clarification what he should do in the future. The court, in its decision, implied that if the mortgage loan originator had instead objected to unlawful activity rather than only asking questions, his activity would have been protected under the CFPA, and his employer may have violated the statute by terminating his employment. See ''Veard v. F&M Bank'', 704 Fed. Appx. 469 (6th Cir. 2017).
=='''Reasonable Belief Standard in Banking Whistleblower Retaliation Cases'''==
The CFPA whistleblower protection law employs a reasonable belief standard.  As long as the plaintiff’s belief is reasonable, the whistleblower is protected, even if the whistleblower makes a mistake of law or fact about the underlying violation of a law or regulation under the CFPB’s jurisdiction.
=='''Prohibited Whistleblower Retaliation Against Financial Services/Banking Industry Employees'''==
The CFPA whistleblower law proscribes a broad range of adverse employment actions, including terminating, “intimidating, threatening, restraining, coercing, blacklisting or disciplining, any covered employee or any authorized representative of covered employees” because of the employee’s protected whistleblowing.
=='''Proving CFPA Whistleblower Retaliation'''==
To prevail under a CFPA whistleblower claim, the whistleblower need only prove that his or her protected conduct was a contributing factor in the adverse employment action, i.e., that the protected activity, alone or in combination with other factors, affected in some way the outcome of the employer’s decision.  Where the employer takes the adverse employment action “shortly after” learning about the protected activity, courts may infer a causal connection between the two. ''Van Asdale v. Int’l Game Tech.'', 577 F.3d 989, 1001 (9th Cir. 2009).
=='''Filing a CFPA Financial Whistleblower Retaliation Claim'''==
CFPA complaints are filed with OSHA, and the statute of limitations is 180 days from the date when the alleged violation occurs, which is the date on which the retaliatory decision has been both made and communicated to the whistleblower.
The complaint need not be in any particular form and can be filed orally with OSHA. A CFPA complaint need not meet the stringent pleading requirements that apply in federal court, and instead the administrative complaint “simply alerts OSHA to the existence of the alleged retaliation and the complainant’s desire that OSHA investigate the complaint.” If the complaint alleges each element of a CFPA whistleblower retaliation claim and the employer does not show by clear and convincing that it would have taken the same action in the absence of the alleged protected activity, OSHA will conduct an investigation.
OSHA investigates CFPA complaints to determine whether there is reasonable cause to believe that protected activity was a contributing factor in the alleged adverse action.  If OSHA finds a violation, it can order reinstatement of the whistleblower and other relief.
='''Federal Railroad Safety Act'''=
='''Federal Railroad Safety Act'''=
='''Criminal Antitrust Anti-Retaliation Act'''=
='''Criminal Antitrust Anti-Retaliation Act'''=