CFPB Regulations: Can We Check the Receipts First?

Every regulation should begin with a basic question: what problem are we trying to solve? When it comes to CFPB regulations, another question should follow closely behind. Will the proposed solution actually protect consumers without creating costs, restrictions, or unintended consequences that outweigh the benefit?

That question is one of the more interesting ideas raised by H.R. 10184, the proposed Consumer Financial Protection Accountability and Reform Act of 2026. The legislation would make significant changes to the Consumer Financial Protection Bureau (CFPB). It would also add new requirements for how the Bureau evaluates, justifies, and measures proposed rules.

To be clear, this is proposed legislation, not current law. I would be surprised if the bill became law in its present form, and I don’t agree with every provision in it.

But one part caught my attention. Before regulators impose a new rule, they should identify the consumer harm they want to prevent. They should also evaluate whether the expected benefit justifies the costs to businesses and consumers.

That seems less like a radical change to rulemaking and more like something we should have been doing all along.

What Problem Are We Actually Trying to Solve?

Under the proposed legislation, the CFPB would have to identify the primary objectives and intended effects of a proposed regulation. It would also have to balance consumer financial protection with access to affordable financial products and services.

The Bureau would then need to explain why regulation is necessary. It would also need to explain why the private market or state, local, or tribal authorities cannot adequately address the problem.

There is a simple principle behind those requirements. Before creating another rule, identify the problem clearly enough that someone outside the regulatory agency can understand why the rule is necessary.

At a minimum, regulators should be able to answer questions such as:

• What harm is occurring?

• How often does it happen?

• How serious is it?

• How many consumers does it affect?

• What evidence demonstrates the problem?

• Is the proposed response proportionate to the harm?

Consumer protection matters. Mortgage transactions are complex, and the financial consequences can be substantial. Borrowers should have meaningful protection from practices that cause real harm.

The size of the solution should bear some relationship to the size of the problem.

CFPB Regulations Have Costs Beyond Compliance Departments

One of my longstanding frustrations with regulatory policy is the tendency to discuss compliance costs as if they exist separately from consumers. They don’t.

A new rule may require a lender to:

• Redesign systems or workflows

• Purchase new technology

• Modify documents and procedures

• Retrain employees

• Hire additional compliance staff or outside consultants

• Expand auditing and monitoring

All those activities cost money.

The regulated business may pay the invoice directly, but the economic impact does not necessarily stop there. Over time, higher regulatory costs can affect pricing, staffing, underwriting, and processing times. They can also influence whether a lender continues to offer a particular product.

This is why the cost-benefit provisions in H.R. 10184 caught my attention.

The proposal would require the CFPB to consider both direct and indirect costs and benefits. The analysis would include more than the compliance costs paid by regulated businesses. It would also look at:

• Approval rates

• Access to financial products and services

• The cost of credit

• Product availability

• Product variety

• Product terms

Those considerations matter because a regulation can protect consumers in one area while making financial services more expensive or less accessible in another.

Cost-Benefit Analysis Means Showing the Work

The CFPB already must consider certain costs and benefits when issuing rules. H.R. 10184 would go further by requiring a more detailed analysis of anticipated effects, alternatives, and outcomes.

Of course, regulators cannot reduce every consequence of a rule to a number. Consumer behavior is complicated. Markets change. Lending decisions involve many variables, and regulatory effects can be difficult to isolate.

The proposal calls for both quantitative and qualitative analysis. If the Bureau cannot reasonably quantify an anticipated effect, it would need to explain why and assess that effect qualitatively.

That distinction matters. “We cannot measure this precisely” may sometimes be the most accurate answer available. But it should not become “therefore, we don’t have to consider it.”

If regulators conclude that a proposed rule will deliver benefits that justify its burdens, they should be able to answer questions such as:

• What assumptions did regulators make?

• What evidence supports the expected benefit?

• What alternatives did they consider?

• Could an existing rule be modified instead?

• What happens if the assumptions prove wrong?

This type of analysis does not weaken consumer protection. Done well, it can improve it. It forces policymakers to distinguish between an attractive idea and a regulation that is likely to produce the intended result.

More regulation and better regulation are not synonyms.

A Regulation Should Have a Scoreboard

Another provision of the proposal makes sense to me. It would require the CFPB to identify key performance indicators, or KPIs, that could later help determine whether a regulation achieved its goals.

Businesses do this routinely. We launch products, change processes, implement systems, and hire vendors. Eventually, someone asks whether those decisions worked. We establish goals, measure results, and make adjustments when the results do not match our expectations.

Why shouldn’t major regulations face a similar test?

If a rule aims to reduce a specific consumer harm, regulators should eventually measure whether that harm actually declined. They should also look at what happened to approval rates, access, pricing, product availability, and loan terms.

The review should go further. How much ongoing compliance burden did the rule create? Did that burden fall disproportionately on small businesses?

A regulation might reduce one type of consumer risk but also increase the price of a product. It could even cause some lenders to stop offering that product. Those outcomes would not automatically prove that the regulation failed, but they should factor into the evaluation.

Without measurable objectives, regulatory success can become surprisingly subjective. A regulator can issue a rule. Companies can implement it. Examiners can test for it, and enforcement actions can follow.

All of that demonstrates regulatory activity. It does not necessarily demonstrate that consumers are better off.

Technical Violations and Consumer Harm Are Not Always the Same Thing

Anyone who has spent enough time in mortgage compliance understands that technical violations and actual consumer harm can be very different things.

Imagine that a borrower receives a required disclosure and understands the transaction. The borrower agrees with the terms, wants the loan, and suffers no financial disadvantage.

Somewhere in the process, however, the lender fails to complete a technical requirement exactly as prescribed.

A compliance violation may still exist. Legal requirements do not disappear simply because no one intended to harm the consumer. Lenders still have an obligation to follow the rules that apply to them.

But policymakers should ask a different question: what injury did the violation cause, and is the regulatory response proportionate to that injury?

We should be able to ask that question without suggesting that consumer protection does not matter. In fact, distinguishing meaningful consumer harm from technical noncompliance can help regulators focus on the practices that create the greatest risk.

When regulators treat every defect as though it presents the same level of harm, limited resources can drift toward technical perfection. That may take attention away from conduct that is far more likely to hurt borrowers.

Does the Regulatory Cost Match the Regulatory Problem?

That last point raises a harder question, and it’s one I keep coming back to. Regulation consumes substantial resources on both sides. Agencies devote money and personnel to writing rules, conducting examinations, and pursuing enforcement. Lenders and servicers devote their own resources to implementing those rules and maintaining compliance.

The amount spent does not tell us whether the underlying consumer problem is serious enough to justify that investment.

If a meaningful share of what a rule catches consists of technical violations that cause little or no consumer injury, it is fair to ask whether the regulatory response matches the actual harm. Answering that question requires data. We need measured consumer outcomes, reliable cost information, and the discipline to separate regulatory activity from demonstrated consumer benefit.

An agency can be busy without being effective.

It can issue rules, conduct examinations, and pursue enforcement actions. The more important question is whether those activities leave consumers meaningfully better off.

That is where H.R. 10184’s proposed cost-benefit analysis and performance measures become interesting. They would push that question into the rulemaking process rather than leaving consumer benefit as an assumption that no one must prove.

Regulatory Overlap Deserves Attention Too

H.R. 10184 would also require the Bureau to examine whether a proposed rule duplicates or conflicts with other federal regulations and orders. If overlap exists, the CFPB would need to justify it and explain how it plans to reduce the related regulatory burden.

For an industry as heavily regulated as mortgage lending, this is hardly a theoretical concern.

Mortgage companies operate within a web of:

• Federal and state laws

• Agency regulations and interpretations

• Investor requirements

• Licensing obligations

• Examination expectations

A new rule rarely arrives on an empty desk. It lands on top of everything already there.

Sometimes additional regulation is still necessary. But before building another regulatory room, it makes sense to check whether the house already has one—and whether the new doorway opens directly into the old staircase.

Understanding what already exists should be part of deciding what needs to exist next.

Good Regulation Should Be Able to Defend Itself

None of this argues for eliminating consumer financial regulation. Consumers deserve fair treatment, accurate information, meaningful choices, and protection from practices that cause financial harm. Effective regulation plays an important role in providing those protections.

The real question is whether a particular rule produces enough consumer benefit to justify the burdens and unintended consequences it may create.

H.R. 10184 may never become law, and I certainly would not recommend changing your compliance program in anticipation of it. But a bill does not have to pass Congress to raise a worthwhile policy question.

Before creating another regulation, shouldn’t regulators understand the harm, examine reasonable alternatives, estimate the costs, and establish a way to determine whether the rule actually worked?

If a proposed rule can clear those hurdles, its justification becomes stronger. If it cannot, perhaps the consumer doesn’t need another requirement.

Perhaps the regulation needs another draft.

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H.R. 10184 is proposed legislation and does not represent current law. This article discusses selected proposed rulemaking provisions and reflects the author’s commentary and opinion. It is not legal advice.