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The Cost of Regulation

Is it the CFPB or BCFP? A change in the name of the Consumer Financial Protection Bureau (CFPB) to the Bureau of Consumer Financial Protection (BCFP) was among the initial slew of changes that the agency's Acting Director, Mick Mulvaney, recommended after taking over from Richard Cordray, who was Director of the agency under the Obama administration.

Earlier this year, the agency changed its name and logo to the Bureau of Consumer Financial Protection. In April, speaking at an industry event, Mulvaney cited the Dodd-Frank Act which names the Bureau as the Bureau of Consumer Financial Protection—saying, "The Consumer Financial Protection Bureau does not exist."

By June, the Bureau had also flipped its logo in its front lobby to reflect the new name. Yet, the name change remains a gray area for the industry the BCFP regulates.

Now an article in The Hill has said that an internal BCFP analysis revealed the cost of the name change to the agency as well as the industry it regulates. According to the article, the name change could cost banks, mortgage providers, payday lenders, and credit card companies a total of approximately $300 million to update their internal databases, regulatory filings, and disclosure forms with the new name to comply with the rules.

While it remains to be seen whether Kathleen Kraninger, whose nomination as BCFP's new Director is set to face a Senate vote later this week, would follow through with the plan, the analysis said that BCFP plans to update its website to reflect the name change by March 2019. The Hill also said that it could take several months or years to implement the rebranding in federal regulations charged to it.

"An agency analysis estimated that the changes necessary to comply with the Fair Credit Reporting Act, the Electronic Fund Transfer Act and certain mortgage regulations would cost firms $100 million for each rule," the article said. "The CFPB cited a 2010 cost-benefit analysis of agency name-changes in its internal report."

Additionally, the analysis found that the name change would cost BCFP between $9 million and $19 million in updating its internal material and website.

About Author: Radhika Ojha

Radhika Ojha, Online Editor at the Five Star Institute, is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her master’s degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Dallas, Texas. You can contact her at Radhika.Ojha@theMReport.com.
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