On March 20, the Consumer Financial Protection Bureau’s Deputy Associate Director Dan Sokolov announced the Bureau’s plans to work with banks in order to quantify the cost of compliance with key federal regulations.
“Regulations can have many benefits for consumers, but the benefits sometimes come at a cost,” Sokolov said in a post on the CFPB web site. “Banks, credit unions, and other financial services providers are concerned with compliance costs—how much it costs to comply with financial regulations—and we’re interested as well,” he added.
The Bureau’s Research, Markets and Regulations department plans to speak with financial institutions to detail the costs institutions incur to comply with consumer regulations for deposit products and services. These discussions will inform the Bureau on the costs related to rules the Bureau took on from other regulators. The Bureau also will examine costs related to checking accounts, debit cards, and other products, Sokolov wrote.
The CFPB presented the new study to members of the Community Bank Advisory Council on March 20 as well, according to Robin Loftus, executive vice president of the $155 million Security Bank, Springfield, Ill., and chairman of that council. “They told us that they keep hearing the cost of compliance has gone up for community banks,” she said. “They also recognized that compliance is a higher cost for smaller banks. Now, they want to build a model for compliance costs,” added Loftus, who noted the Bureau has decided to begin with Regulations D and E.
The Bureau already has emailed banks inviting them to join the study. Ultimately, only seven community banks will take part in the study. Generally, the group will have the same asset range as CBAC. (A list of the community banks on CBAC with asset sizes can be found here.) The Bureau also has said it will look for an even distribution of rural and urban banks.