Sen. Jon Kennedy (R-La.) introduced the Transparency in CFPB Cost-Benefit Analysis Act which would amend the Dodd-Frank Act to require, among other things, the Consumer Financial Protection Bureau (CFPB) perform a cost-benefit analysis during any rulemaking activity.
“Now more than ever, the Consumer Financial Protection Bureau must make sure that it doesn’t hamstring a struggling economy with burdensome regulations. The CFPB needs to put taxpayers before Washington bureaucrats, and this bill would help ensure that,” Kennedy said.
The bill would also require the CFPB to:
- conduct a qualitative and quantitative assessment of all direct and indirect costs and benefits of the proposed regulation, including compliance costs; effects on economic activity, efficiency, competition, and capital formation; regulatory and administrative costs; and costs imposed on state, local, and tribal entities.
- consult with the Small Business Administration’s Office of Advocacy on any proposed rule that would increase costs to small businesses.
- Assess the regulatory burden that proposed regulation would impose on regulated entities.
- Ensure proposed rules are not duplicative, inconsistent, or incompatible with an existing rule.
- Provide a probability distribution of potential cost and benefit outcomes.
- Disclose the source material for any assumptions and identify any studies or data the rulemaking used.
The legislation received strong support from trade groups, including the Credit Union National Association (CUNA), the U.S. Chamber of Commerce, the Independent Consumer Bankers Association, and the Consumer Bankers Association.
“We thank Sen. Kennedy for introducing this bill that would bring needed accountability and transparency to the CFPB,” CUNA President and CEO Jim Nussle said. “The entities subject to the bureau’s rules and regulations deserve an honest breakdown of costs and benefits, information that will also be beneficial to consumers, lawmakers, and small businesses.”
The House counterpart to this proposed legislation was introduced by Rep. Alex Mooney (R-W. Va.) in March.