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8 8 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T GOVERNMENT CATO Head Casts Doubt on Poll The Americans for Financial Reform study skewed its questions, the institute's Associate Director asserts. T hough a recent poll by the Americans for Fi- nancial Reform showed overwhelming support for both the Dodd-Frank Act and the Consumer Financial Protec- tion Bureau (CFPB), according to Thaya Brook Knight, Associate Director of Financial Regulation Studies at the CATO Institute, the poll might not have been the most accurate marker for approv- al. In a recent blog post, Knight claims the poll's questions weren't just misleading but downright "disingenuous" in places. The AFR's poll, released in mid-July, showed 74 percent of those surveyed supporting the Dodd-Frank Wall Street Reform and Consumer Protection Act and 73 percent supporting the CFPB. Though these may seem higher- than-average numbers, according to Knight, they're actually on the low end considering how the poll's questions were worded. "What has not been as widely reported is how skewed the ques- tions were," Knight wrote. "Given the questions, it's surprising there was not more support for Dodd- Frank and the CFPB." Knight says the phrasing of many of the poll's questions were stilted, using inflammatory terms like "risky" and "abusive" without proper explanation. Here's how the question related to Dodd-Frank read: "Now please listen to this description of the Wall Street Reform law that was passed after the financial crisis. In addition to requiring federal oversight of a larger range of financial compa- nies, this law also prohibits banks from certain risky practices and created the Consumer Financial Protection Bureau to fight against abusive financial practices that hurt consumers. It also bans taxpayer- funded bailouts of large banks and financial companies and, instead, sets up a system where investors rather than taxpayers bear the losses of bank failures. Please tell me whether, overall, you favor or oppose this law." "This question also lobs a number of very nuanced and deeply controversial terms at the respondent—words like 'risky' and 'abusive'—with almost no context," Knight wrote. "What is the optimal level of 'risk' for financial institutions, who should assess 'riskiness,' and how risk can be adequately hedged are questions at the core of ongoing debates over the cause of the 2009 financial crisis and future policy considerations. Labeling a set of practices as 'risky' is conclusory and deliberately ignores any exist- ing controversy." Knight says the verbiage on the CFPB question was also disin- genuous and that it essentially suggests "the debate over the CFPB is between those who are for abusive practices and those who are against them." Overall, Knight says, the questions brush off the true is- sues surrounding Dodd-Frank and the CFPB and, ultimately, don't provide accurate proof that Americans support either. Rural-Focused Bill in the Works New legislation made its way through the U.S. Appropriations Committee that, if passed into law, would force HUD to recalibrate how it determines eligibility for certain grants. A bill introduced by Rep. Jaime Herrera Beutler (R-Washing- ton) would require that the U.S. Department of Housing & Urban Development (HUD) report any area it uses "flawed income data"—or data with a margin of error that's 20 percent or higher—to evaluate Community Development Block Grants (CDBG) eligibility. These reports would need to be sub- mitted to both the House and Senate Appropriations Com- mittees within 90 days of the evaluation. Until now, HUD has calculated community income levels by averaging five-year data from the American Community Survey. HUD data from 2014 shows many towns in Beutler's district—includ- ing Pe Ell, Vader, and Morton— have been deemed "too affluent" to benefit from CDBG grants. According to Beutler's office, "This requirement would im- pact rural communities in Lewis County [Washington] that, based on inaccurate household income data, were determined to be 'too affluent' to qualify for Community Development Block Grants." Beutler says HUD has often made mistakes when deeming a community "too affluent" and that the agency has even used data with margins of error as high as 91.5 per- cent when determining eligibility. "This agency is supposed to return tax dollars to the com- munities that need it most, but it has made serious mistakes in disqualifying communities like Toledo, Pe Ell, and Vader for be- ing 'too affluent,'" Beutler said. "It can't cover up these mistakes if this legislation becomes law." This isn't the first time Beutler has taken on HUD. She also created a provision that requires HUD to have alternative methods of measuring income levels. "After years of pressuring for transparency, my efforts will again require HUD to make the extent of inaccuracy of its data public—and it will be held ac- countable for its reporting errors," she said. "While it shouldn't take an act of Congress to get a public agency to provide basic transpar- ency, I'm not going to let up on this issue or the needs of our rural communities until we have a long-term solution." The bill was passed by the House Appropriations Committee last month but has not been scheduled to appear in front of the House floor as of press. ". . . it shouldn't take an act of Congress to get a public agency to provide basic transparency." —Jaime Herrera Beutler (R-Washington)