CFPB Director Suggests Additional Non-Monetary Penalties for Repeat Violators

CFPB Director Rohit Chopra recently warned that companies that repeatedly violate consumer protection and privacy laws may face additional non-monetary penalties, such as penalties that identify executives and require “meaningful” changes to business practices. Chopra made these remarks at the International Association of Privacy Professionals Global Privacy Summit in Washington, D.C. on April 4, 2023.  According to Chopra, fines alone do not adequately deter some companies from repeatedly violating the law.

Chopra explained that these additional penalties are particularly appropriate when companies are under a court order or an agency order and yet immediately violate the order. He believes such repeat offenders should be forced to change management and/or alter their future business practices to avoid further violations.

Chopra also explained that current enforcement policies have “disproportionately” affected smaller firms. He recommends that regulatory agency enforcers target those who create the most harm, which is often the larger firms.  In addition, he suggested that larger firms, with more financial resources, may view writing a check as a rite of passage, while smaller firms understand that one mistake can jeopardize the entire company.