Federal

Transparency in CFPB Cost-Benefit Analysis Act

Source: Congress.gov · 871 words in original text

What This Bill Does

This bill, called the "Transparency in CFPB Cost-Benefit Analysis Act," adds new requirements to how the Bureau of Consumer Financial Protection creates rules. The Bureau must now include detailed cost and benefit analyses in its proposed rules before publishing them.

Who It Affects

- The Bureau of Consumer Financial Protection - Businesses that the Bureau regulates - Small businesses - State, local and tribal governments - The Office of Advocacy within the Small Business Administration - Consumers

Key Provisions

- The Bureau must publish each proposed rule notice in the Federal Register and include a statement explaining why the regulation is needed (Sec. 2) - The Bureau must examine whether the private market, State, local or tribal authorities can adequately address the problem instead of a federal rule (Sec. 2) - The Bureau must provide a quantitative and qualitative assessment of all expected direct and indirect costs and benefits, including compliance costs for businesses, effects on competition and economic activity, and costs to State, local and tribal entities (Sec. 2) - The Bureau must identify reasonable alternative approaches to the regulation and analyze their costs and benefits (Sec. 2) - If a proposed rule would increase costs for small businesses, the Bureau must consult the Office of Advocacy within the Small Business Administration to find ways to minimize those costs (Sec. 2) - The Bureau must explain whether the regulation duplicates, contradicts or conflicts with other federal rules and, if so, justify why the new rule is still needed (Sec. 2) - The Bureau must identify and discuss all assumptions and studies, including whether studies were peer-reviewed, used to support the cost-benefit analysis (Sec. 2)

What Changes

Currently, the Bureau can propose rules with limited analysis requirements. This bill requires the Bureau to include much more detailed information in every proposed rule, including thorough examinations of costs, benefits, alternatives, and justifications for why federal action is necessary instead of letting states or private markets handle the issue.

Important Definitions

None defined in bill text.

I 118TH CONGRESS 1ST SESSION H. R. 1313 To enhance rulemaking requirements for the Bureau of Consumer Financial Protection, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MARCH 1, 2023 Mr. MOONEY (for himself, Mr. POSEY, Mr. FLOOD, Mr. DAVIDSON, Mr. EMMER, Mr. SESSIONS, Mr. ROSE, Mr. OGLES, Mr. NUNN of Iowa, Mrs. KIM of California, Mr. STEIL, Mr. WILLIAMS of Texas, Mr. FITZGERALD, Mr. HUIZENGA, Mr. LOUDERMILK, Mr. LUETKEMEYER, Mr. KUSTOFF, Mrs. HOUCHIN, Mr. BARR, and Mr. NORMAN) introduced the following bill; which was referred to the Committee on Financial Services A BILL To enhance rulemaking requirements for the Bureau of Consumer Financial Protection, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Transparency in 4 CFPB Cost-Benefit Analysis Act’’. 5 VerDate Sep 11 2014 00:03 Mar 17, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1313.IH H1313 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 1313 IH SEC. 2. TRANSPARENCY IN COST-BENEFIT ANALYSIS. 1 Section 1022(b) of the Consumer Financial Protec- 2 tion Act of 2010 (12 U.S.C. 5512(b)) is amended by add- 3 ing at the end the following: 4 ‘‘(5) ADDITIONAL RULEMAKING REQUIRE- 5 MENTS.— 6 ‘‘(A) IN GENERAL.—Each notice of pro- 7 posed rulemaking issued by the Bureau shall be 8 published in its entirety in the Federal Register 9 and shall include— 10 ‘‘(i) a statement of the need for the 11 proposed regulation; 12 ‘‘(ii) an examination of why the Bu- 13 reau must undertake the proposed regula- 14 tion and why the private market, State, 15 local, or tribal authorities cannot ade- 16 quately address the problem; 17 ‘‘(iii) an examination of whether the 18 proposed regulation is duplicative, incon- 19 sistent, or incompatible with other Federal 20 regulations and orders; 21 ‘‘(iv) if the proposed regulation is 22 found to be duplicative, inconsistent, or in- 23 compatible with other Federal regulations 24 and orders, a discussion of— 25 VerDate Sep 11 2014 00:03 Mar 17, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1313.IH H1313 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 1313 IH ‘‘(I) why the proposed regulation 1 is justified; 2 ‘‘(II) how the proposed regulation 3 can coexist with the existing regula- 4 tions; and 5 ‘‘(III) how the Bureau plans to 6 reduce the regulatory burden associ- 7 ated with the duplicative, inconsistent, 8 or incompatible proposed regulation; 9 ‘‘(v) a quantitative and qualitative as- 10 sessment of all anticipated direct and indi- 11 rect costs and benefits of the proposed reg- 12 ulation, including— 13 ‘‘(I) compliance costs for all reg- 14 ulated entities, including small busi- 15 nesses; 16 ‘‘(II) effects on economic activity, 17 efficiency, competition and capital for- 18 mation; 19 ‘‘(III) regulatory and administra- 20 tive costs of implementation; and 21 ‘‘(IV) costs imposed on State, 22 local and tribal entities; 23 VerDate Sep 11 2014 00:03 Mar 17, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1313.IH H1313 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 1313 IH ‘‘(vi) an identification of reasonable 1 alternatives to the regulation, including 2 modification of an existing regulation; 3 ‘‘(vii) an analysis of the costs and 4 benefits, both quantitative and qualitative, 5 of any alternative identified pursuant to 6 clause (v); 7 ‘‘(viii) if the Bureau determines the 8 proposed regulation would increase costs 9 for small businesses, then the Bureau shall 10 consult the Office of Advocacy within the 11 Small Business Administration to deter- 12 mine ways to minimize the effect of direct 13 and indirect costs imposed on small busi- 14 nesses by the proposed regulation; 15 ‘‘(ix) if quantified net benefits of the 16 proposed action do not outweigh the quan- 17 tified net benefits of the alternatives, a jus- 18 tification of the regulation; 19 ‘‘(x) if quantified benefits identified 20 pursuant to clause (iv) do not outweigh the 21 quantified costs of the regulation, a jus- 22 tification of the regulation; 23 ‘‘(xi) an assessment of how the bur- 24 den imposed by the regulation will be dis- 25 VerDate Sep 11 2014 00:03 Mar 17, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1313.IH H1313 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 1313 IH tributed; including whether consumers, or 1 small businesses will be disproportionately 2 burdened; and 3 ‘‘(xii) when feasible, and using appro- 4 priate statistical techniques, a probability 5 distribution of the relevant outcomes of the 6 proposed regulation. 7 ‘‘(B) ASSUMPTIONS AND STUDIES USED.— 8 With respect to the information required to be 9 included under subparagraph (A), the Bureau 10 will include— 11 ‘‘(i) a discussion of underlying as- 12 sumptions used as a basis for such infor- 13 mation; and 14 ‘‘(ii) a description of any studies or 15 data used in preparing such information, 16 and whether such studies were peer-re- 17 viewed.’’. 18 Æ VerDate Sep 11 2014 00:03 Mar 17, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\H1313.IH H1313 kjohnson on DSK79L0C42PROD with BILLS

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