Bill Overview
Title: Transparency in CFPB Cost-Benefit Analysis Act
Description: This bill sets forth information required to be included in a rulemaking made by the Consumer Financial Protection Bureau (CFPB). Specifically, the CFPB must publish a justification of the proposed rulemaking; a quantitative and qualitative assessment of all anticipated direct and indirect costs and benefits; alternatives to the proposed rulemaking; impacts on small businesses; and any assumptions, data, or studies used in preparing this information.
Sponsors: Rep. Mooney, Alexander X. [R-WV-2]
Target Audience
Population: People globally engaged in financial systems or using financial services
Estimated Size: 330000000
- The Consumer Financial Protection Bureau (CFPB) is a U.S. government agency that aims to protect consumers in the financial sector through rulemaking and enforcement of financial laws.
- The legislation targets CFPB rulemaking, which directly affects financial institutions, consumers, and businesses involved or impacted by such rules.
- Consumers in the U.S. will be affected due to the potential changes in transparency and accountability which could lead to more consumer-friendly regulations.
- Financial institutions will be directly impacted, needing to adhere to any new rules established by the CFPB under these guidelines.
- Any business interacting with the financial system might experience direct or indirect effects from changes to CFPB rules, including banks, credit unions, mortgage lenders, payday lenders, and fintech companies.
- Since this CFPB legislation is specific to the United States, its impact is geographically limited to U.S. territories and citizens.
Reasoning
- The policy targets transparency in rulemaking at the CFPB, which is expected to affect a wide range of stakeholders, including consumers and small businesses.
- Not every consumer or business may notice the impact immediately, as the initial effects are more procedural, related to how rules are made and justified.
- For financial institutions and businesses, there will be some increased administrative burden which may or may not translate to changes in consumer or business experience depending on how these institutions implement new disclosures.
- Consumers who are actively engaged in financial products (e.g., taking loans, using credit cards) may eventually experience benefits from better-considered, consumer-friendly regulations.
- Small businesses relying on credit might worry initially about regulatory changes, but they could benefit from more predictable regulatory impacts in the long term.
- The geographic scope is limited to the United States, and with budget constraints, CFPB would need to prioritize key stakeholder engagement.
Simulated Interviews
Small Business Owner (New York, NY)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 15/20
Statement of Opinion:
- If CFPB is clearer about the impacts on businesses like mine, I can plan better for the future.
- It's good to have more transparency but I'm concerned about any increase in administrative burden.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 8 |
Financial Analyst (Chicago, IL)
Age: 30 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 12/20
Statement of Opinion:
- The policy's focus on cost-benefit transparency is positive.
- It might increase reporting requirements, but the clarity for our customers will be beneficial.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 8 |
Mortgage Broker (Austin, TX)
Age: 50 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- I'm concerned about the potential increase in regulatory complexity.
- If these changes lead to clearer rules, they might benefit the industry in the long run.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 5 |
Tech Entrepreneur (San Francisco, CA)
Age: 26 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- Greater transparency could foster innovation in fintech by clarifying regulatory requirements.
- Our team is keen to see what alternative regulatory proposals might emerge.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 10 | 9 |
| Year 10 | 10 | 9 |
| Year 20 | 9 | 8 |
School Teacher (Miami, FL)
Age: 37 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 20/20
Statement of Opinion:
- I just want to know that the financial products I use are safe and fair.
- Not sure if I'll notice the changes, but I like the idea of more consumer protection.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 7 |
Retired (Phoenix, AZ)
Age: 66 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 15/20
Statement of Opinion:
- I'm cautious about how regulations affect my investments.
- Transparency is good; it gives more peace of mind in financial decisions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Freelance Graphic Designer (Seattle, WA)
Age: 29 | Gender: other
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- I hope new CFPB rules will make lending practices more fair and transparent.
- Right now, managing finances feels overwhelming; this could help if it aims to simplify processes.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 7 | 6 |
| Year 20 | 8 | 7 |
Corporate Lawyer (Omaha, NE)
Age: 55 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 8.0 years
Commonness: 8/20
Statement of Opinion:
- This could increase the demand for compliance consulting, which is beneficial for my practice.
- The policy might make navigating regulations easier for both financial institutions and their customers.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 8 | 7 |
Bank Teller (Los Angeles, CA)
Age: 42 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 18/20
Statement of Opinion:
- We deal directly with consumers. More transparency could bring more customer trust.
- The transition may require staff training, which is a burden but potentially worth it.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Software Engineer (Raleigh, NC)
Age: 36 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 6.0 years
Commonness: 10/20
Statement of Opinion:
- Transparency in rules is beneficial as it provides a clear framework for developing compliant financial software.
- The policy might drive demand for more technological solutions in finance.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 8 | 8 |
Cost Estimates
Year 1: $50000000 (Low: $40000000, High: $60000000)
Year 2: $55000000 (Low: $44000000, High: $66000000)
Year 3: $60500000 (Low: $48400000, High: $72600000)
Year 5: $72605000 (Low: $58084000, High: $87126000)
Year 10: $89100000 (Low: $71280000, High: $106920000)
Year 100: $201000000 (Low: $160800000, High: $241200000)
Key Considerations
- The costs could change depending on the scale of rulemaking and number of rule proposals made by the CFPB annually.
- Training and upskilling of current personnel to meet new requirements is a significant upfront investment.
- There may be cost savings from avoided lawsuits or regulatory rollbacks as the rules become clearer and more predictable.