A bill has been introduced in the House of Representatives that, if passed, would require the Consumer Financial Protection Bureau to conduct a comprehensive cost-benefit analysis for every regulation it proposes, as a means of limiting “regulatory overreach” by the regulator.
The bill, House Bill 7412 — the Transparency in CFPB Cost-Benefit Analysis Act — was introduced by Rep. Alexander Mooney [R-W.V.] and has been referred to the House Financial Services Committee for its consideration.
When publishing proposed regulations in the Federal Register, the CFPB would be required to include an explanation from the CFPB why it must undertake the proposed regulation and explain why other authorities are unable to address the problem, an examination to make sure the proposed regulation is not duplicative, inconsistent, or incompatible with other regulations, a quantitative and qualitative assessment of “all anticipated direct and indirect costs and benefits of the proposed regulation,” including compliance costs, regulatory and administrative costs of implementation, and the effects on economic activity and competition. The CFPB would also be required to included “reasonable” alternatives to the regulation.
If the proposed regulation is found to increase costs for small businesses, the CFPB would be required to consult with the Small Business Administration to determine ways to reduce the direct and indirect costs while also justifying the regulation.
“It is long past time for the Consumer Financial Protection Bureau to adhere to a rigorous and transparent cost-benefit analysis,” said Rep. Mooney, in a statement. “My bill will help stop regulatory overreach by the CFPB; and provide regulatory relief to small businesses, community banks, and credit unions across West Virginia.”
A press release from Rep. Mooney’s office included comments of support from the Consumer Bankers Association, the Independent Community Bankers of America, the U.S. Chamber of Commerce, and Credit Union National Association.