H.R. 4590 would direct the Federal Deposit Insurance Corporate (FDIC), the National Credit Union Administration (NCUA), the Comptroller of the Currency (OCC), the Consumer Financial Protection Bureau (CFPB), and the Federal Reserve to study the challenges faced by new depository institutions seeking a charter. Those banking regulators also would be required to jointly issue a strategic plan to increase the number of entities applying for new depository institution charters.
The operating costs for the FDIC, NCUA, OCC, and CFPB are classified in the federal budget as direct spending. However, the NCUA and the OCC collect fees from financial institutions to offset their operating costs; those fees are treated as reductions in direct spending. Costs incurred by the Federal Reserve reduce remittances to the Treasury, which are recorded in the budget as revenues.
H.R. 4590 also would reduce the maximum allowable size of the Federal Reserve Surplus fund on September 30, 2022. As a result, enacting the legislation would increase remittances to the Treasury (which are recorded in the budget as revenues) in 2023. Reducing the fund also would reduce the amount of interest-earning assets that the Federal Reserve holds, which would reduce its future interest earnings and associated remittances to the Treasury.
On November 29, 2021, CBO transmitted a cost estimate for H.R. 4590, the Promoting New and Diverse Depository Institutions Act, as ordered reported by the House Committee on Financial Services. The two versions of the legislation are different, and CBO’s estimates of their budgetary effects reflect those differences. H.R. 4590, as ordered reported, did not include the provision to reduce the maximum allowable size of the Federal Reserve Surplus fund. CBO estimated that prior version of H.R. 4590 would increase the deficit by $3 million over the 2022-2031 period.
