Under current law, the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), and Office of the Comptroller of the Currency (OCC) supervise depository institutions and evaluate their financial condition and operations under the Uniform Financial Institutions Ratings System (UFIRS). That system assigns composite ratings in six areas to uniformly assess the safety and soundness of financial institutions. H.R. 2516 would direct those agencies to add a new component to the ratings to assess practices aimed at promoting diversity and inclusion.
The operating costs of the FDIC, NCUA, and OCC are classified in the federal budget as direct spending. Using information from some of those agencies, CBO estimates that under the bill administrative costs would total about $1 million annually to update the UFIRS and broaden the scope of financial institution examinations. CBO expects that those activities would require two additional staff members per agency and estimates that gross direct spending would increase by $12 million over the 2022-2031 period. However, the NCUA and OCC collect fees from financial institutions to offset their operating costs; those fees are considered reductions in direct spending. Therefore, CBO estimates, the net effect on direct spending would be $3 million over the 2022-2031 period.
Costs incurred by the Federal Reserve reduce remittances to the Treasury, which are recorded in the budget as revenues. CBO estimates that enacting H.R. 2516 would increase the Federal Reserve’s administrative costs by $4 million over the 2022-2031 period, thus decreasing revenues by that amount.
