Strengthen the Financial Institutions Reform, Recovery, and Enforcement Act

In 1989, Congress passed the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) to strengthen banking fraud enforcement and create a banking whistleblower program. However, in the past three decades, it has become clear that while FIRREA could be a powerful anti-fraud tool, there is significant room for improvement in its whistleblower provisions.

Whistleblowers can qualify for a reward for their disclosures under FIRREA, but unfortunately, the whistleblower reward provision is capped. This not only goes against the best practices of whistleblower laws but also disincentivizes whistleblowers from stepping forward as can be seen by the low rate of whistleblower reports under the law.

As the United States continues to face a global pandemic laden with opportunities for fraud in high-risk industries, now is the time for Congress to strengthen FIRREA by increasing the upper limit on whistleblower rewards to up to 30% of sanctions imposed.

With a rewards program that truly incentivizes whistleblowers to step forward, FIRREA has the potential to bring in billions in sanctions, deter fraud, and provide a financial lifeline for those in banking who are considering becoming whistleblowers and fear retaliation. Urge Congress to strengthen FIRREA today.