H.R. 2702, FIRM Act

H.R. 2702 would prohibit the consideration of reputational risk by the relevant federal financial regulators when regulating, examining, or supervising financial institutions. Those federal financial regulators include the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Federal Reserve. The bill also would require those agencies to report on the implementation and changes made as a result of enacting the bill. On August 7, 2025, the Administration issued an Executive Order that included requirements similar to those in H.R. 2702.

The operating costs for the CFPB, FDIC, NCUA, and OCC are classified in the federal budget as direct spending. Using information from the affected agencies, CBO estimates that the administrative costs to enact H.R. 2702 would be insignificant. However, the NCUA and OCC are authorized to collect fees from regulated institutions to cover administrative expenses. After accounting for those fees, CBO estimates that enacting H.R. 2702 would increase net direct spending by an insignificant amount over the 2026-2035 period, primarily for the FDIC.

Under current law, the CFPB is permanently authorized to spend amounts transferred from the combined earnings of the Federal Reserve in an amount necessary to carry out its responsibilities, subject to a statutory cap that was most recently lowered by the 2025 reconciliation act. Because CBO expects that, under current law, the CFPB will spend all transferred funds up to its statutory cap in the years that the combined earnings of the Federal Reserve are sufficient to fund the CFPB, we do not attribute any increase in direct spending for the CFPB to this bill. Any spending for additional costs from the CFPB implementing the bill would need to be provided by future appropriations.

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. 2702 would decrease revenues by an insignificant amount over the 2026-2035 period.

If federal financial regulators increase annual fees to offset the costs of implementing the bill, H.R. 2702 would increase the costs of an existing private-sector mandate on entities required to pay those fees. CBO estimates that the incremental cost of the mandate would be small and would fall well below the annual threshold established in the Unfunded Mandates Reform Act (UMRA) for private-sector mandates ($206 million in 2025, adjusted annually for inflation).

The bill contains no intergovernmental mandates as defined in UMRA.

On February 5, 2026, CBO transmitted a cost estimate for S. 875, the FIRM Act as reported by the Senate Committee on Banking, Housing, and Urban Affairs on March 18, 2025. Sections 2 through 5 of S. 875 are similar to H.R. 2702. Both bills would prohibit the consideration of reputational risk by federal banking agencies when regulating, examining, or supervising a depository institution or credit union. CBO’s estimates of the budgetary effects of those provisions in both bills are the same.

The CBO staff contacts for this estimate are Julia Aman (for federal costs), Nate Frentz (for revenues), and Rachel Austin (for mandates). The estimate was reviewed by H. Samuel Papenfuss, Deputy Director of Budget Analysis.