GAO Report: CFPB Must Prioritize Consumer Risks and Assess Policy Tools
The bureau is also retrospectively assessing significant rules after five years.
1/8/2019 8:00 AM
The Government Accountability Office is calling on Kathy Kraninger, director of the Consumer Financial Protection Bureau, to implement a systematic process for prioritizing risks to consumers and to consider how to use the bureau's available policy tools—such as rulemaking, supervision, enforcement, and consumer education—to address these risks.
The recommendation is part of the GAO’s annual review of the CFPB’s processes and other activities according to the report titled “Consumer Financial Protection Bureau Needs a Systemic Process to Prioritize Consumer Risks.”
While the CFPB did not agree or disagree with the recommendation, the bureau concurred that it is important to have processes in place to prioritize and address consumer financial risks.
As part of this annual report, the GAO examined steps the CFPB has taken to:
- Identify, monitor, and report on risks to consumers in support of its rulemaking and other functions;
- Retrospectively assess the effectiveness of certain rules within five years of their effective dates.
“In 2015, [the] CFPB initiated a bureau-wide process for using market data and other information to set policy priorities related to addressing risks to consumers. However, [the] CFPB has not yet decided whether it will continue to use this process to set priorities. [The] CFPB currently lacks a systemic, bureau-wide process for prioritizing financial risks to consumers and considering how it will use its tools—such as rulemaking, supervision, and consumer education—to address them,” the report states.
It is also conducting assessments of significant rules within five years of their effective date. The bureau determines rules to assess based on four factors:
- The cumulative annual cost to covered persons of over $100 million;
- The rule’s effects on the features of consumer financial products and services;
- The rule’s effects on business operations of providers that support the product or service, and;
- The rule’s effects on the market, including the availability of consumer financial products and services.
Assessments this year include the bureau’s rule on cross-border money transfers (Remittance Rule), the Ability to Repay/Qualified Mortgage Rule, and the Real Estate Settlement Procedures Act Servicing Rule, according to the GAO report.
Read the complete report here.
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