Bill Overview
Title: Federal Reserve Loss Transparency Act
Description: This bill prohibits transfers to the Consumer Financial Protection Bureau from the Board of Governors of the Federal Reserve System if Federal Reserve banks incur specified quarterly operating losses. The bureau is directly funded through transfers from the board.
Sponsors: Rep. Hill, J. French [R-AR-2]
Target Audience
Population: People affected by changes in funding to the Consumer Financial Protection Bureau
Estimated Size: 331002651
- The Consumer Financial Protection Bureau (CFPB) is primarily funded through transfers from the Federal Reserve, and this bill would affect its funding sources if Federal Reserve banks report operating losses.
- The Federal Reserve System plays a crucial role in the U.S. economy by influencing monetary policy, but its direct involvement with the general public is limited to its economic impact rather than personal interactions.
- Consumers who benefit from protections by the CFPB—such as financial regulations and consumer rights protections—might be impacted if the CFPB faces funding cuts.
- The Federal Reserve's losses can vary each quarter, which could lead to uncertainty in CFPB's funding.
- Although the bill specifically targets U.S. institutions, the general financial stability and consumer protections in the U.S. can have global implications given the interconnectedness of economies.
Reasoning
- The Federal Reserve Loss Transparency Act primarily affects the Consumer Financial Protection Bureau (CFPB), which plays a critical role in protecting consumers in financial transactions. If the CFPB faces funding constraints, it might lead to reduced consumer protection measures.
- Individuals in the population might not directly notice the impact unless they engage directly with financial markets or face unfair financial practices that the CFPB addresses.
- Considering immediate budget restrictions, it's likely that the first few years will show minimal changes in wellbeing scores due to public unawareness or gradual impact.
- The target population spans a wide socio-economic range, including both highly affected consumers facing potential financial risks and those unaware or unaffected by direct CFPB interventions.
- The majority of the population will see no immediate policy impact, but a high awareness campaign could change public perception over a more extended period, potentially visible in year 5 and beyond as the policy fully rolls out.
- Reflecting on cost constraints and realistic projections, most interviewees will demonstrate negligible difference in perception, with notable changes only under scenarios of direct CFPB benefit reduction.
Simulated Interviews
Financial Advisor (New York, NY)
Age: 35 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 12/20
Statement of Opinion:
- I rely on CFPB resources to advise my clients effectively. Any cuts may require me to seek alternate sources, which could complicate my work.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 6 | 8 |
| Year 20 | 5 | 8 |
Construction Worker (Dallas, TX)
Age: 50 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 15/20
Statement of Opinion:
- I don't really know much about the government regulations, but if they protect me from bad loans, they're good to have around.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 5 | 6 |
| Year 10 | 5 | 6 |
| Year 20 | 4 | 6 |
Small Business Owner (Miami, FL)
Age: 28 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 8/20
Statement of Opinion:
- The CFPB's presence ensures that small businesses like mine aren't manipulated by larger financial entities.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 4 | 6 |
| Year 3 | 4 | 6 |
| Year 5 | 3 | 7 |
| Year 10 | 4 | 8 |
| Year 20 | 4 | 9 |
Retired Teacher (Springfield, IL)
Age: 62 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 14/20
Statement of Opinion:
- My retirement depends on sound advice, if regulations are not enforced, I might face unfair practices.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 5 | 8 |
| Year 10 | 6 | 8 |
| Year 20 | 5 | 8 |
Tech Entrepreneur (San Francisco, CA)
Age: 30 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 9/20
Statement of Opinion:
- Regulations need clear, consistent funding to assure startups aren't blindsided by rule changes.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 7 | 9 |
| Year 10 | 7 | 9 |
| Year 20 | 6 | 9 |
Public School Administrator (Seattle, WA)
Age: 45 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 16/20
Statement of Opinion:
- Government agencies like the CFPB can be beneficial but often feel disconnected from local everyday needs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Real Estate Agent (Phoenix, AZ)
Age: 40 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 10/20
Statement of Opinion:
- Rules and protections provided by the CFPB create a fairer market and ease my role as a middleman.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 5 | 7 |
| Year 10 | 4 | 8 |
| Year 20 | 3 | 8 |
College Student (Boston, MA)
Age: 22 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 17/20
Statement of Opinion:
- As long as I can save for the future, I don't see direct impact from financial regulations yet.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Bank Manager (Charlotte, NC)
Age: 55 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 20.0 years
Commonness: 6/20
Statement of Opinion:
- Changes in the CFPB's funding could either streamline or complicate banking processes based on how regulations shift.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 6 | 8 |
| Year 3 | 5 | 9 |
| Year 5 | 5 | 9 |
| Year 10 | 5 | 9 |
| Year 20 | 5 | 9 |
Nurse (Nashville, TN)
Age: 37 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 13/20
Statement of Opinion:
- Financial protections help me keep my head above water with debt; cuts could worry me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 7 |
| Year 5 | 5 | 7 |
| Year 10 | 5 | 7 |
| Year 20 | 5 | 7 |
Cost Estimates
Year 1: $0 (Low: $0, High: $500000000)
Year 2: $0 (Low: $0, High: $1000000000)
Year 3: $200000000 (Low: $0, High: $2000000000)
Year 5: $400000000 (Low: $0, High: $2500000000)
Year 10: $800000000 (Low: $0, High: $3000000000)
Year 100: $5000000000 (Low: $0, High: $10000000000)
Key Considerations
- The unpredictability of Federal Reserve operational losses makes exact cost assessments challenging.
- Periodic suspension of financial transfers could lead to operational disruptions at the CFPB, requiring Congress to intervene.
- Effects on consumer protection, if funding for the CFPB is reduced, could have broader economic implications.