Sen. Elizabeth Warren (D-Mass.) has asked the Consumer Financial Protection Bureau’s (CFPB) internal watchdog to investigate whether the Trump administration’s pending name change for the agency violates federal law.
Warren asked Mark Bialek, inspector general for the Federal Reserve system and CFPB, in a Monday letter to open a probe into the cost, legality, rationale and impact of changing the agency’s name.
{mosads}“We are concerned that the name change effort imposes unnecessary and significant costs on taxpayers and the business community, deprives the CFPB of funds it can use to protect consumers, and violates legal requirements,” Warren wrote in the Tuesday letter.
Under former acting CFPB Director Mick Mulvaney, the agency in March began referring to itself as the Bureau of Consumer Financial Protection, its formal legal name under the Dodd-Frank Act.
While the name change might seem superficial, an internal CFPB analysis reported by The Hill this month found that the entire process could cost the CFPB between $9 million and $19 million and firms regulated by the agency roughly $300 million.
Warren, citing The Hill’s report, said the steep projected cost of the name change coupled with planned budget cuts “would severely limit the number of investigations and examinations the CFPB can undertake, the number of complaints it can handle, and the number and scope of cases the CFPB can bring on behalf of consumers.”
Banks and lenders would be forced to spend roughly $300 million total to update internal databases, regulatory filings and disclosure forms with the new name in order to comply with rules enforced by the bureau, according to the agency’s analysis.
Warren also raised concerns that CFPB violated federal law by moving ahead with the name change without conducting legally required cost-benefit analysis.
“The failure to justify the name change, combined with the failure to follow basic procedural rules, the wasteful expenditures, and the confusing implementation suggest a serious breakdown in the policy-making process at the CFPB,” Warren wrote.
The battle over the name change is a personal fight for Warren, who helped design and staff the CFPB as an adviser to former President Obama. The CFPB is closely associated with Warren, and Mulvaney spoke frequently about his desire to move the agency away from her influence.
It’s unclear if the CFPB’s name change will move forward under Director Kathy Kraninger, who began her five-year term leading the agency last week. Kraninger told reporters last week that she was aware of the potential cost and planned to take action on the issue soon.
“I care more about what the agency does than what it is called,” Kraninger said. “There are resource implications here that I will weigh and that we’ll be talking about.”
There are also concerns among CFPB staff and liberal nonprofits that the name change could confuse the vulnerable consumers the agency is meant to protect. While the bureau has adopted a seal with the new name, its website sports a “We’re the CFPB” banner.
“In that environment, a consumer would be hard-pressed to know whether a remediation check they receive with the old CFPB seal is a scam or whether they have the right number if they call the complaint hotline and an operator from the BCFP answers the phone,” Warren wrote.