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: Sen. Kennedy, John [R-LA]
Target Audience
Population: Individuals with financial accounts or debts
Estimated Size: 240000000
- The bill affects the Consumer Financial Protection Bureau (CFPB), a government agency that focuses on consumer protection in the financial sector.
- The CFPB's rulemakings influence financial products and services, impacting both providers (financial institutions) and consumers of those services.
- Consumers in the financial sector include nearly all individuals with financial accounts or debts, making the impact widespread.
- Small businesses are specifically mentioned in the bill, indicating they will be directly affected by changes in CFPB rules.
- The CFPB's regulations primarily cover financial activities within the United States, hence primarily affecting US residents.
Reasoning
- The policy aims to provide transparency in the rulemaking process, impacting both consumers and small businesses by clarifying costs, benefits, and alternatives to proposed regulations.
- While nearly all individuals in the US are connected to financial institutions in some way, the degree of impact may vary from none to high depending on their involvement in regulated activities.
- Small business owners and individuals directly affected by CFPB's rulemaking might experience changes in their perceptions of trust and decision-making related to financial products.
- Considering budget constraints and population estimates, we have simulated a variety of commonness scores to reflect diverse scenarios based on how widespread financial products regulation affects daily life.
Simulated Interviews
Financial Advisor (Phoenix, AZ)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- This policy can help my clients make more informed decisions as they'll understand the costs and benefits of financial products.
- The increased transparency can restore trust in financial products among clients.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Small Business Owner (Detroit, MI)
Age: 34 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- Understanding loan terms better can help me manage my business finances efficiently.
- I'm hopeful this will make borrowing less risky for small business owners.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Software Engineer (Seattle, WA)
Age: 29 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 3.0 years
Commonness: 16/20
Statement of Opinion:
- Since I handle most transactions digitally, having transparency in fees is crucial.
- I am moderately interested to see how this policy might reduce hidden costs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Bank Manager (Atlanta, GA)
Age: 50 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- Additional transparency may add regulatory burden, but it helps long-term clarity.
- My hope is it streamlines regulatory processes with clear guidelines.
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 | 8 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Retired (Dallas, TX)
Age: 63 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 15/20
Statement of Opinion:
- Clarity on financial products is valuable, especially for seniors.
- I just want to avoid unexpected fees that can affect my budget.
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 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
College Student (New York, NY)
Age: 22 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 7.0 years
Commonness: 13/20
Statement of Opinion:
- Understanding loan terms better is crucial for my financial security.
- I hope this affects how accessible and affordable student loans are.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 5 |
Accountant (Chicago, IL)
Age: 39 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 7.0 years
Commonness: 10/20
Statement of Opinion:
- Increased transparency can make regulatory compliance more manageable.
- Advising small businesses could become easier with clear rules.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Real Estate Agent (Miami, FL)
Age: 47 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 9/20
Statement of Opinion:
- More transparency could simplify mortgage processes for clients.
- It might lead to fewer loan-related surprises.
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 | 7 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Nonprofit Executive (Los Angeles, CA)
Age: 55 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- This policy could enhance financial literacy by making rules more accessible.
- Transparency is key in demystifying financial products.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Freelancer (San Francisco, CA)
Age: 30 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 14/20
Statement of Opinion:
- This policy may increase my financial independence by clarifying costs associated with financial products.
- I wish this would help freelance workers manage finances better.
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 | 6 | 6 |
| Year 20 | 6 | 6 |
Cost Estimates
Year 1: $10000000 (Low: $8000000, High: $15000000)
Year 2: $8500000 (Low: $7000000, High: $13000000)
Year 3: $9000000 (Low: $7500000, High: $13500000)
Year 5: $9500000 (Low: $8000000, High: $14000000)
Year 10: $10000000 (Low: $8500000, High: $14500000)
Year 100: $11000000 (Low: $9000000, High: $15000000)
Key Considerations
- The complexity of measuring indirect and long-term benefits and costs increases administrative burden.
- Potential legal challenges could arise from increased transparency expectations.
- Focus on small businesses is important given their contribution to the economy and potential vulnerability to regulatory changes.