WASHINGTON – Sen. John Kennedy (R-La.), a member of the Senate Banking Committee, and Sen. Cynthia Lummis (R-Wyo.) reintroduced the Transparency in CFPB Cost-Benefit Analysis Act to ensure that regulations issued by the Consumer Financial Protection Bureau (CFPB) do not impose unreasonable costs or burdens on taxpayers, financial institutions or consumers.
The legislation would revise the Dodd–Frank Wall Street Reform and Consumer Protection Act to require the CFPB to conduct a comprehensive cost-benefit analysis of all proposed rules. This would help prevent burdensome regulations from imposing unnecessary costs on hardworking Americans.
“Washington bureaucrats shouldn’t be able to saddle hardworking Americans with costly regulations without showing that the benefits outweigh the costs. The CFPB ought to put taxpayers and consumers first, and my bill would make sure the agency shows its homework before imposing another costly rule,” said Kennedy.
“Every rule the CFPB writes carries a price tag, and Wyoming families, small banks, and businesses foot the bill. This legislation forces the agency to count those costs, weigh its alternatives, and disclose its data before it acts. I’m proud to join Senator Kenndy in reining in an agency that answers to no one,” said Lummis.
The bill would require the CFPB to:
- 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 used in the rule making.
Full text of the Transparency in CFPB Cost-Benefit Analysis Actis available here.
