The existing whistleblower protections laws for employees at FDIC insured institutions or credit unions, codified at 12 U.S.C. §§ 1790b and 1790c and 12 U.S.C. § 1831j, are very problematic. The laws do not contain provisions for the payment of attorney fees or costs to prevailing whistleblowers. Also, internal whistleblower disclosures are not explicitly covered under these laws.
The scope of a protected disclosure is very narrow under these laws. Under 12 U.S.C. § 1831j, employees at FDIC insured institutions must raise their concerns regarding violations of banking laws with the FDIC, the Federal Housing Finance Agency, the Federal Reserve Board, the Comptroller of Currency and/or the Attorney General.
Under 12 U.S.C. §§ 1790b and 1790c, employees at insured credit unions must raise their allegations of banking law violations with the National Credit Union Administration Board, and/or the Attorney General. Significantly, reports to either the Secretary of Treasury or to FinCEN are not covered under these older laws.
These two older laws do not have provisions permitting anonymous or confidential submissions. Congress’s failure to cover credit unions or FDIC insured financial institutions under the new (and far more effective) AML Act’s anti-retaliation law is a major problem with the AML Act.
However, because the IRS and the securities laws have much stronger anti-retaliation provisions, employees should carefully consider whether their AML allegations may be covered under either of these laws, and if so, file disclosures using the IRS and Dodd-Frank laws. In this manner employees should be able to benefit from the stronger anti-retaliation laws covered under these statutes.