Consumer Financial Protection Bureau building in Washington, D.C. Photo by Diego M. Radzinschi
The CFPB is seeking an assistant director to run its Office of Cost-Benefit Analysis, a move that they agency is moving ahead with plans to increase its review of the economic implications of its rules.
Credit unions welcomed that development, but critics of the agency under Acting Director Mick Mulvaney said the office is not necessary.
Recommended For You
Mulvaney announced earlier this year that he was establishing an Office of Cost Benefit Analysis to be housed in the director's office. Critics have said that the agency, under former Director Richard Cordray failed to conduct rigorous cost- benefit analyses of its rules.
In particular, the payday lending industry, as well as congressional Republicans, have criticized the rule governing short-term lending. Mulvaney has pledged to revise that rule.
"The bureau's current cost-benefit analysis is woefully inadequate, often doing little more than rubber-stamping proposed regulations," the free-market Competitive Enterprise Institute said in comments submitted to the agency earlier this year. "An Office of Cost Analysis that plainly looks at costs to the industry, consumers, innovation, and market competition, including unintended consequences, is one of the most important structural changes the bureau could make."
Credit union trade groups have been pushing the agency to conduct more cost-benefit research.
"A careful evaluation of the benefits and costs of rules and regulations by the Bureau would be a welcome addition in our book and to the credit union industry," said Carrie Hunt, NAFCU's executive vice president of government affairs and general counsel.
CUNA officials said the trade group has consistently pushed the agency to institute that type of analysis.
However, Senate Banking Committee ranking Democrat Sherrod Brown of Ohio, in a report issued this week, said cost-benefit analysis at the CFPB is likely to be used as a rationale for weakening rules.
He pointed to Mulvaney's comments about wanting to institute that type of research, adding, "these remarks track a longstanding push by Wall Street for quantitative cost-benefit analysis in financial regulation, purportedly offered as an objective, neutral framework for policymaking."
Brown said that several researchers have criticized the effort to reduce complex financial regulation to a simple, quantitative analysis.
Brown added that Mulvaney may have an ulterior motive in placing the office under the director's office, contending that Mulvaney may want to bring the bureau's evidence-based analysis under his control so that he can influence it.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.
