In a recent post on its blog, the CFPB announced that its Research, Markets, and Regulations team is now studying the costs of complying with the consumer finance regulations the CFPB inherited from other agencies. The CFPB said that its first step will be to talk to banks across the country about their compliance costs related to deposit products and services.
In a notice published in October 2012, the CFPB sought comments on its request to the Office of Management and Budget for generic clearance of its plans to collect of information from providers of consumer financial services on compliance costs and other effects of regulations. The request was opposed by the American Bankers Association (ABA) and Consumers Bankers Association (CBA), who asserted that a generic clearance was inappropriate in view of the significant substantive and policy implications of the information to be collected by the CFPB. The ABA and CBA expressed concern that a generic clearance would not allow for public and industry feedback on the design of information collection instruments and the selection of respondents to ensure that accurate and representative data was collected.
Despite the objections of the ABA and the CBA, the CFPB’s request was approved by OMB. The recent announcement presumably means the CFPB is now beginning to act on that approval to collect compliance costs data.
We support the CFPB’s efforts to obtain compliance costs data. Indeed, we are disappointed the CFPB seems not to have focused on the costs associated with the compliance steps recommended in its new guidance on auto dealer participation, which as my colleague Chris Willis observed, will result in increased costs for both indirect auto finance companies and auto dealers that will inevitably be passed along to consumers.
In its announcement, the CFPB said that it hopes “to become better and smarter regulators” through its research. The CFPB’s research will not help it become a better and smarter regulator unless it heeds the ABA’s and CBA’s comments and takes steps to ensure that the data it collects captures all costs and other impacts of its regulations and accurately reflects industry experience.