WASHINGTON—The Transparency in CFPB Cost/Benefit Analysis Act has been introduced in Congress.
The legislation, according to its sponsors-- Sens. John Kennedy (R-LA), Cynthia Lummis (R-WY), Tim Scott (R-SC) and Bill Hagerty (R-TN)—is designed to 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
- Costs imposed on state, local, and tribal entities
Additional Requirements
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
- Disclose the source material for any assumptions and identify any studies or data the rulemaking used
The House companion bill to the legislation was introduced in the House in April by Rep. Alex Mooney (R-WV), NAFCU noted.