NAFCU-supported bill requiring cost-benefit analysis of CFPB regs introduced in the Senate
Sens. John Kennedy, R-La., Cynthia Lummis, R-Wyo., Tim Scott, R-S.C., and Bill Hagerty, R-Tenn., Wednesday introduced the NAFCU-supported Transparency in CFPB Cost-Benefit Analysis Act. The legislation would help ensure the CFPB does not establish regulations that would result in unreasonable costs or harms to taxpayers, financial entities, or consumers.
The legislation would also require qualitative and quantitative assessments of all direct and indirect costs and benefits of a proposed CFPB regulation, including:
- compliance costs;
- effects on economic activity, efficiency, capital formation, and competition; and
costs imposed on state, local, and tribal entities.
In addition, the bill would:
- identify alternatives to a 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 a 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; and disclose the source material for any assumptions and identify any studies or data the rulemaking used.
“It is long past time for the Consumer Financial Protection Bureau to adhere to a rigorous and transparent cost-benefit analysis,” stated Mooney, who also noted the legislation would put an end to the CFPB’s regulatory overreach and provide much needed relief for small businesses and credit unions.
“NAFCU applauds Representative Mooney’s leadership on ensuring transparent evaluation on regulations set forth by the CFPB,” said NAFCU President and CEO Dan Berger. “The Transparency in CFPB Cost-Benefit Analysis Act will ensure the Bureau is held to the same standard as other agencies when reviewing the cost-benefit analysis for its proposed rules. While credit unions understand the need for appropriate and balanced rulemaking, it’s important for regulators to understand the overall impact, whether, through compliance costs or the upshot on competition, these rules would have on financial institutions.”
Of note, the House companion bill to this legislation was introduced by Rep. Alex Mooney, R-W.Va., in April.
NAFCU will monitor the legislation and will continue to work closely with Congressional leaders and the CFPB to ensure credit unions are not burdened by unnecessary regulations.
Source: NAFCU
Senate Bill introduced to rein in CFPB overreach – NAFCU – CFPB
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