Exclusive: Consumer bureau name change could cost firms $300 million

Changing the name of the Consumer Financial Protection Bureau (CFPB) could cost the businesses it regulates more than $300 million, according to an internal agency analysis obtained by The Hill.

Banks, lenders and other financial services firms subject to CFPB supervision could be required to spend millions of dollars if the agency goes through with a rebranding proposal from acting Director Mick Mulvaney.

{mosads}The agency, established by the 2010 Dodd-Frank Wall Street reform law, has been known as the Consumer Financial Protection Bureau and CFPB since it opened in 2011. It was led by Richard Cordray, a Democrat, from 2012 until his resignation in November 2017.

Mulvaney, a Republican who’s also the White House budget director, replaced Cordray. In April, he began referring to the agency as the Bureau of Consumer Financial Protection, shortened to Bureau or BCFP.

The CFPB in March released a new logo that referred to the agency as the Bureau of Consumer Financial Protection, and in June flipped the sign in its front lobby to reflect the name change.

The acting chief has said it should be known as the BCFP, reflecting the name codified in the Dodd-Frank legislation that became law.

A CFPB analysis of the proposed name change projected additional costs for banks, mortgage providers, payday lenders and credit card companies under the agency’s watch.

The CFPB enforces dozens of financial regulations meant to protect and inform consumers who have purchased loans or lines of credit. The agency’s analysis found that firms would be forced to spend roughly $300 million total to update internal databases, regulatory filings and disclosure forms with the new name in order to comply with those rules.

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 CFPB cited a 2010 cost-benefit analysis of agency name-changes in its internal report.

Those costs would be spread out among the several hundred firms regulated by the CFPB.

An agency spokesman declined to comment on the analysis or how many businesses it would affect.

A name change would cost the agency between $9 million and $19 million, by updating internal materials and its website, according to the analysis. The CFPB is funded through the Federal Reserve system, with fees paid by U.S. banks.

The agency is aiming to update its website to reflect the name change by March, according to the internal analysis. But it could take several months or years to implement the rebranding in federal regulations charged to the agency.

It’s unclear whether Kathy Kraninger, who President Trump nominated to serve as the CFPB’s full-time director, would follow through on the name change if she is confirmed by the Senate.

The Senate voted to end debate on Kraninger’s nomination last week, and is expected to confirm her before the end of the year.

Mulvaney has sought drastic reductions in the agency’s power and spending to ease its affect on the businesses it supervises. He was appointed by Trump to lead the agency in November 2017, pledging to rein in the CFPB’s oversight practices.

Republicans and financial sector advocates have blasted the CFPB for its aggressive penalties on banks and lenders alleged to have violated consumer protection laws. As a House GOP lawmaker from 2011 to 2017, Mulvaney often said the CFPB had abused its power and overstepped the law.

Mulvaney has said that the name change reflects his desire to overhaul bureau.

“We changed the name because it’s the name in the statute,” Mulvaney said in June. “And if … your whole theme is going to be, ‘We’re going to follow the statute,’ I thought it was a good, small way, but a very visible way, to send a message.”

While Dodd-Frank formally established the agency as the Bureau of Consumer Financial Protection, the law also makes several references to the Consumer Financial Protection Bureau.

Mulvaney has spoken frequently about his desire to move the CFPB away from its roots as the brainchild of Sen. Elizabeth Warren (D-Mass.), who helped design the agency as an adviser to former President Obama.