WASHINGTON – Sen. John Kennedy (R-La.) today introduced the Transparency in CFPB Cost-Benefit Analysis Act along with Sens. Cynthia Lummis (R-Wyo.), Tim Scott (R-S.C.) and Bill Hagerty (R-Tenn.). The legislation would help ensure that the Bureau of Consumer Financial Protection (CFPB) does not establish regulations that would result in unreasonable costs or harms to taxpayers, financial entities or consumers.
“The Consumer Financial Protection Bureau shouldn’t be able to shackle banks, credit unions or small businesses with rules that only make sense to bureaucrats. The benefits of any new rule should be clear and outweigh any costs. Unfortunately, the CFPB doesn’t have a great track record of that,” said Kennedy.
“I would like to thank Sen. Kennedy for introducing this important piece of legislation in the U.S. Senate. It is long past time for the Consumer Financial Protection Bureau to adhere to a rigorous and transparent cost-benefit analysis,” said Rep. Alex Mooney (R-W.Va.), who introduced this bill in the House of Representatives.
“For far too long, the CFPB has operated far outside of the oversight of Congress. The Transparency in CFPB Cost-Benefit Analysis Act is simply the bare minimum in terms of holding the CFPB accountable to Congress and the taxpayers. Thank you to Senator Kennedy and Congressman Mooney for introducing this important legislation,” said Lummis.
The bill would amend the Dodd-Frank Wall Street Reform and Consumer Protection Act to require a thorough cost-benefit analysis for proposed CFPB rules.
The Transparency in CFPB Cost-Benefit Analysis Act would:
- 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.
The U.S. Chamber of Commerce, Independent Community Bankers Association, Consumer Bankers Association, Credit Union National Association and National Association of Federal Credit Unions support this legislation.
The text of the bill is available here.