A recent report from the White House Council of Economic Advisors says the regulatory burden imposed by the Consumer Financial Protection Bureau (CFPB) has increased the compliance and liability costs associated with consumer financial products, which financial institutions pass on to consumers in the form of higher prices and reduced product offerings. The Council of Economic Advisers (CEA) estimates that since 2011, the CFPB has cost consumers between $237-$369 billion, including fiscal costs, increased borrowing expenses, and reduced originations.
“The Consumer Financial Protection Bureau (CFPB) has steadily expanded its jurisdiction since inception, extending oversight across all consumer credit markets, including mortgages, auto lending, and credit cards. Through a combination of regulation, supervision, and the persistent threat of enforcement, the CFPB has increased the cost of credit for both lenders and borrowers.”
“Moreover, instances of regulatory overreach and actions that bypass the Administrative Procedure Act (APA) introduce additional costs and uncertainty into credit markets that can further push lenders to retreat or limit offerings. As a result, the aggregate “dollars returned to consumers” figure of $21 billion that is often cited by the CFPB severely understates the broader burden imposed on the financial system.”
Click here to read the full report at the White House Council of Economic Advisors.
