S. 1484 would amend federal laws that regulate certain financial institutions and securities markets. Specifically, the legislation would change the process and procedures that federal regulators follow for determining which firms should be designated as systemically important financial institutions (SIFIs), and it would alter a number of provisions of current law that provide protection to consumers of financial products.
CBO estimates that enacting the legislation would increase net direct spending by $284 million and reduce revenues by $93 million over the next 10 years, leading to a net increase in the deficit of $377 million over the 2016-2025 period. Some of that cost would be recovered from financial institutions in years after 2025. Pay-as-you-go procedures apply because enacting the legislation would affect direct spending and revenues.
CBO estimates that enacting the legislation would not increase net direct spending or on-budget deficits by at least $5 billion in at least one of the four consecutive 10-year periods beginning in 2026.
S. 1484 would amend several provisions of law enforced by the Securities and Exchange Commission (SEC). CBO estimates the implementing those changes would cost about $2 million over the 2016-2020 period. Under current law, the SEC is authorized to collect fees sufficient to offset its annual appropriation; therefore, we estimate the net cost to the SEC would be negligible.
S. 1484 contains intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA) because it would limit the application of some state laws. The bill would preempt state laws that govern civil liability, nullification of specific types of contracts, and licensure of mortgage originators. Although the bill would limit the application of state laws, it would impose no duty on states that would result in additional spending or a loss of revenues.
S. 1484 contains private-sector mandates as defined in UMRA on individuals and businesses in the financial services industry. The bill would eliminate exiting rights of action, require additional reporting for some insurers, apply standards for processing funds in two American territories, and increase certain regulatory fees. Because the incremental changes required to comply with the mandates would be small relative to existing practices, CBO estimates that the aggregate cost of the mandates in the bill would probably fall below the annual threshold established in UMRA for private-sector mandates ($154 million in 2015, adjusted annually for inflation).