The Consumer Financial Protection Bureau: A Five Year Retrospective

This paper provides a 5 year review of the Consumer Financial Protection Bureau which is part (title X) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFPB is one of the most controversial parts of the Dodd-Frank Act. It has been argued (mostly by the banking industry) that the CFPB imposes a regulatory burden on banks without any measurable benefits for those it is designed to protect. It is also one of the first regulatory policies that embraces elements of Behavioral Economics. It does this with a regulatory framework that discourages the supply of certain financial products that are potentially toxic to the financial health of less than fully rational households. We find that CFPB as a regulatory policy conflicts with other government policies designed to encourage home ownership and access to financial products among the poor. One possible solution to this contradiction in conflicting government policies is to carry out the social goal of housing for the poor within a government sponsored enterprise much like the Federal Farm Credit System.