S. 2155 would modify provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd Frank Act) and other laws governing regulation of the financial industry. The bill would change the regulatory framework for small depository institutions with assets under $10 billion (community banks) and for large banks with assets over $50 billion. The bill also would make changes to consumer mortgage and credit-reporting regulations and to the authorities of the agencies that regulate the financial industry.
CBO estimates that enacting the bill would increase federal deficits by $671 million over the 2018-2027 period; that increase in the deficit represents an increase in direct spending of $233 million and a decrease in revenues of $439 million. Some of that cost and reduction in revenues would be recovered through collections from financial institutions in years after 2027.
CBO also estimates that, assuming appropriation of the necessary amounts, implementing the bill would cost $77 million over the 2018-2027 period.
Pay-as-you-go procedures apply because enacting the legislation would affect direct spending and revenues.
CBO’s estimate of the bill’s budgetary effect is subject to considerable uncertainty, in part because it depends on the probability in any year that a systemically important financial institution (SIFI) will fail or that there will be a financial crisis. CBO estimates that the probability is small under current law and would be slightly greater under the legislation. Despite that underlying uncertainty, CBO has endeavored to develop estimates for this bill that are in the middle of the distribution of possible outcomes.
CBO estimates that enacting S. 2155 would not increase net direct spending by more than $2.5 billion or on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2028.
S. 2155 contains intergovernmental and private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). CBO estimates that the costs of the mandates on public and private entities would fall well below the annual thresholds established in UMRA for intergovernmental and private-sector mandates ($78 million and $156 million, respectively, in 2017, adjusted annually for inflation).