Financial Institutions Anti-Fraud Enforcement Act of 1990
Also known as: FIAFEA
Signed into law by George H. W. Bush
November 29, 1990
Passed in the wake of the savings and loan crisis of the 1980s, the Financial Institutions Anti-Fraud Enforcement Act sought to create a new level of accountability for financial institutions by allowing individuals to report violations of certain criminal laws impacting financial institutions such as banks and credit unions. By bringing these actions forward, the individual whistleblower becomes eligible for a reward based on the successful prosecution and collection of penalties. The statute is unique because it creates a civil cause of action for whistleblowers based on federal criminal laws, such as mail and wire fraud, among others.
Enforcement & Remedies
Under the FIAFEA framework, a whistleblower brings a claim by filing a declaration under oath describing the facts and circumstances giving rise to the fraudulent activity. The whistleblower can also attach documents and witness information to support the claim. As with other whistleblower causes of action, the declarant here must be the original source of the information.
After the whistleblower files the declaration, the Attorney General may decline to pursue the claim within a year. This would simply end the claim. The Attorney General could also decide to prosecute the action. To the extent there is a recovery, the declarant would be entitled to a share.
Finally, and most interestingly, the Attorney General may not address the declaration within a year. At this point, the whistleblower may then seek to compel the Attorney General to either: 1) prosecute the action; or 2) award a contract to counsel of the whistleblower's choosing to prosecute the claim. Thus, the whistleblower and his counsel become a sort of deputy U.S. Attorney to prosecute the fraud. This is a unique construct in whistleblower laws.
Notable sponsors: Joe Biden Strom Thurmond