The legislation in the 117th Congress, a companion bill to the House proposal, would address burdens of CFPB regulations and evaluate compliance costs and the impact on small businesses, among other topics. Here, ACA covers its stance on the legislation for members.
07/19/2022 10:00 A.M.
2.5 minute read
Legislation to ensure CFPB regulations do not include unreasonable costs or harms to taxpayers, financial entities or consumers was introduced last week by U.S. Sens. John Kennedy, R-La., Sens. Cynthia Lummis, R-Wyo., Tim Scott, R-S.C., and Bill Hagerty, R-Tenn.
The Transparency in CFPB Cost-Benefit Analysis Act would amend the Dodd-Frank Wall Street Reform and Consumer Protection Act to require a thorough cost-benefit analysis for proposed CFPB rules, according to a news release from Kennedy’s office. The act serves as companion legislation to a bill, H.R. 7412, from U.S. Rep. Alex Mooney, R-W-Va.
ACA International has supported cost-benefit analysis legislation related to the CFPB’s rulemaking, including Mooney’s bill, ACA previously reported.
“The cost-benefit analysis required in the recent proposed legislation in the Senate will help ensure poorly developed rules from the CFPB, or well-intended but harmful solutions, don’t come into existence,” said ACA CEO Scott Purcell. “This bill is asking for common sense by having the right stakeholders at the table in the bureau’s rulemaking process, which we haven’t seen under leadership from Director Rohit Chopra. We’ve seen too often in the recent past a disdain for including the full breadth of people and organizations that are closest to the issues being represented in crafting the solution.”
- Conduct a qualitative and quantitative assessment of all direct and indirect costs and benefits of the proposed regulation. This includes compliance costs; effects on economic activity, efficiency, competition and capital formation; regulatory and administrative costs; and costs imposed on state, local and tribal entities.
- Identify alternatives to the proposed regulation and compare the benefits and costs of those alternatives.
- Consult with the Small Business Administration’s Office of Advocacy if a proposed rule would increase costs on small businesses.
- Assess the regulatory burden that the proposed regulation would impose on regulated entities.
- Provide a probability distribution of potential cost and benefit outcomes.
- Ensure the proposed rule is not duplicative, inconsistent or incompatible with an existing rule.
- Disclose the source material for any assumptions and identify any studies or data the rulemaking used.
“We’re supportive of a proposal like this because it helps limit short-sighted processes by regulators and the significant harmful effects that arise from not having the right people at the table and following the right processes for proposed rules, such as accepting comments and holding meetings with stakeholders,” Purcell said.
Related Content from ACA International
If you have executive leadership updates or other member news to share with ACA, contact our communications department at [email protected]. View our publications page for more information and our news submission guidelines here.