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: Sen. Hagerty, Bill [R-TN]
Target Audience
Population: Individuals impacted by changes in the Consumer Financial Protection Bureau's effectiveness.
Estimated Size: 330000000
- The Federal Reserve system directly influences the entire U.S. economy, thus changes in its operations could indirectly affect nearly all U.S. residents.
- The Consumer Financial Protection Bureau (CFPB) is primarily responsible for protecting consumers in relation to financial products and services, covering aspects like mortgages, credit cards, and banking policies.
- If the CFPB's ability to operate is reduced due to this bill, consumers across the U.S. who rely on or have been protected by its regulations and advocacy would potentially be affected.
Reasoning
- The policy mainly targets the operational connection between the Federal Reserve and the Consumer Financial Protection Bureau (CFPB), potentially impacting the CFPB's funding and consequently its ability to enforce financial regulations.
- While nearly all U.S. consumers interact with financial products affected by the CFPB, the direct impact of such a funding cut may be more significant on vulnerable populations who rely heavily on these protections.
- Given the magnitude of the U.S. population, the commonness scores help lean towards a statistical distribution where most may be generally aware of financial institutions' roles but a subsection may be particularly reliant on the protections offered by entities like the CFPB.
- Individuals working within or directly affected by the financial services industry might experience more direct impacts, contrary to those in unrelated fields who are only indirectly impacted.
Simulated Interviews
Financial Advisor (New York, NY)
Age: 28 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 15/20
Statement of Opinion:
- I'm concerned about reduced oversight and protection for consumers.
- The CFPB's role is crucial for maintaining trust in financial sectors.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 6 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 6 | 8 |
| Year 20 | 7 | 8 |
Automobile Factory Worker (Detroit, MI)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 18/20
Statement of Opinion:
- I don't know much about these things, but we need someone looking out for the little guy's financial safety.
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 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Retired Teacher (Dallas, TX)
Age: 60 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 15.0 years
Commonness: 13/20
Statement of Opinion:
- I feel secure knowing there are protections against financial malpractice, but this could change if funding cuts affect CFPB.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 5 | 7 |
| Year 5 | 5 | 7 |
| Year 10 | 6 | 7 |
| Year 20 | 7 | 7 |
Small Business Owner (Chicago, IL)
Age: 35 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- I'm worried that if consumers feel less protected, they might be more hesitant to spend, which could affect my business.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 7 |
| Year 2 | 5 | 7 |
| Year 3 | 5 | 7 |
| Year 5 | 5 | 7 |
| Year 10 | 5 | 7 |
| Year 20 | 6 | 7 |
Loan Officer (Los Angeles, CA)
Age: 50 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 15/20
Statement of Opinion:
- This policy could undermine the confidence borrowers have that we operate under strict consumer-friendly regulations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 6 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 6 | 8 |
| Year 20 | 7 | 8 |
Tech Startup Employee (San Francisco, CA)
Age: 22 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 12/20
Statement of Opinion:
- Our tech solutions depend on robust financial regulations; I fear this bill could weaken them.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 8 |
Factory Supervisor (Phoenix, AZ)
Age: 38 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 15.0 years
Commonness: 16/20
Statement of Opinion:
- The worry is not immediate, but any weakening of oversight might eventually trickle down to affect my financial stability.
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 | 7 |
| Year 20 | 7 | 7 |
Hospital Nurse (Miami, FL)
Age: 55 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 18/20
Statement of Opinion:
- I don’t usually think about these things day-to-day, but it's reassuring to know protections are there if needed.
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 | 8 |
Software Engineer (Seattle, WA)
Age: 40 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 0.0 years
Commonness: 8/20
Statement of Opinion:
- I believe in personal accountability with financial products; oversight is important but might not directly affect me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Bank Teller (Atlanta, GA)
Age: 30 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 11/20
Statement of Opinion:
- Even indirect cuts to CFPB funding worry me because it could lessen the framework we've built trust upon.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 6 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 8 | 8 |
Cost Estimates
Year 1: $5000000 (Low: $1000000, High: $10000000)
Year 2: $5500000 (Low: $1000000, High: $11000000)
Year 3: $6050000 (Low: $1000000, High: $12100000)
Year 5: $6655000 (Low: $1000000, High: $13310000)
Year 10: $7320500 (Low: $1000000, High: $14641000)
Year 100: $180611000 (Low: $1000000, High: $360000000)
Key Considerations
- The unpredictability of Federal Reserve quarterly losses makes consistent estimation difficult.
- Indirect impacts on the CFPB's operational capacity could have far-reaching effects on consumer protection.
- Potential fluctuations in consumer confidence due to changes in CFPB effectiveness.
- Economic conditions influencing Federal Reserve performance will vary significantly.