The CFPB has published a general policy statement clarifying its position on criminally liable regulatory offenses. The statement comes in accordance with President Trump’s EO 14294 published on May 9, which directed agencies to combat the “overcriminalization” present in federal regulations, highlighting “strict liability” criminal regulatory offenses that do not require proof of intent to violate the law.

Trump’s executive order required that each federal agency publish in the Federal Register a “plan to address criminally liable regulatory offenses,” within 45 days; other agencies have already published their plans.

The CFPB’s statement, which is a “general statement of policy” under the Administrative Procedure act,” sets out a roadmap to include mens rea standards as part of potential criminal liability for regulatory offenses and general policies for criminal DOJ referrals.

The CFPB enforces The Truth in Lending Act, the Real Estate Settlement Procedures Act, and the Electronic Fund Transfer Act, some of whose provisions are enforceable with criminal penalties.

Key assessments

The statement described several general factors that would go into an assessment of whether a violation will be referred to the DOJ:

• “The harm or risk of harm, pecuniary or otherwise, caused by the alleged offense.
• “The potential gain to the putative defendant that could result from the offense.
• “Whether the putative defendant held specialized knowledge, expertise, or was licensed in an industry related to the rule or regulation at issue.
• “Evidence, if any is available, of the putative defendant’s general awareness of the unlawfulness of his conduct as well as his knowledge or lack thereof of the regulation at issue.”

The statement also lists further actions the CFPB intends to take regarding establishing mens rea requirements pursuant to EO 13294. These include:

• Before May 9 2026, furnishing a report to the Director of the Office of Management and Budget (OMB) listing all potential violations enforceable by the CFPB that can result in a criminal penalty, including violation’s range of criminal penalties and applicable mens rea standards.
• The CFPB will consider whether a violation is included in this report when making its decision to refer a case to the DOJ.
• The CFPB will, in consultation with the Attorney General, determine whether there is statutory authority to adopt a background mens rea for criminal regulatory offenses, unless a particular mens rea is specified. The agency will also submit a report to the OMB assessing whether the applicable mens rea standards are appropriate, present a plan to adopt a background mens rea standard, and provide justifications for individual deviations from it.
• The CFPB intends to include a statement identifying that proposed rules are criminal regulatory offenses, along with the authorizing statute, written in consultation with the DOJ. The CFPB also intends to publish the applicable mens rea requirement for each element of a criminal regulatory offense, with citations to the authorizing statute.

CFPB and criminal referrals

Despite its commitment to an ostensible reform of its referral practices, the CFPB rarely referred violations of consumer finance laws to the DOJ for criminal investigation, though there are some some notable cases on the books from 2013 and 2014.

However, during the tenure of now-departed CFPB director Rohit Chopra, the agency signaled in a Memorandum of Understanding with the DOJ that it was taking a closer look at scaling up criminal referrals, including for antitrust violations in banking mergers.

However, with its operations all but ground to a standstill after funding and staffing cuts, it seems unlikely that the consumer finance watchdog will initiate civil actions against regulated entities, let alone refer potentially criminal cases to the DOJ.