Mulvaney Insists on Changing Name of Bureau, Will Cost Millions
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. Banks, lenders, and other financial services companies which are subject to CFPB supervision could be required to spend millions of dollars if the agency goes through with a rebranding proposal initiated by acting Director Mick Mulvaney.
The agency has been known as the Consumer Financial Protection Bureau and CFPB since it opened in 2011, and was headed up 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 or BCFP. In March of this year, the CFPB released a new logo referring to the agency as the Bureau of Consumer Financial Protection. Then, in June, changed the sign in its front lobby to reflect the change.
The acting chief said he believed the entity should have always been referred to as the BCFP, reflecting the name codified in the Dodd-Frank legislation that became law. However, a CFPB analysis projected additional costs for industry players. More specifically, 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.
Estimates related to complying with the Fair Credit Reporting Act, the Electronic Fund Transfer Act and certain mortgage regulations would cost firms $100 million for each rule. Those costs would be spread out among the several hundred firms regulated by the CFPB.
A name change would cost the agency between $9 million and $19 million, by updating internal materials and its website. This would be 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 2019.
Mulvaney was appointed by Trump to lead the agency in November 2017, pledging to rein in the CFPB’s oversight practices. Critics were quick to accuse Mulvaney of changing the name to lower the CFPB’s brand recognition with consumers. It’s hard for consumers to turn to an agency for which they don’t even know the name. A Google search for BCFP doesn’t register hardly anything in the browser as of yet.
“Only an idiot would walk away from such a successful investment in this brand,” Karl Frisch, executive director of consumer watchdog organization Allied Progress, said. “An idiot or someone who wants to make the CFPB look, feel, and sound more bureaucratic and less like an accessible champion for consumers.”
“Major hypothetical that I don’t waste much time thinking about,” said one industry group head. “I am not convinced those estimates are even correct since there has been zero direction exactly what would need changing.”
Mulvaney himself said at the ABA conference held earlier this year, “I’m trying to get in the habit of now saying the ‘BCFP.’ It’s really, really hard to do that when you’ve said the CFPB for so long. We do call it the bureau and were hoping that that sticks.”