S. 5628: Transparency in CFPB Cost-Benefit Analysis Act

This bill would require the Consumer Financial Protection Bureau (CFPB) to provide much more detail when it proposes new regulations.

What would change

Under the bill, every CFPB proposed rule would have to be published in full in the Federal Register and include a detailed explanation of:

• why the rule is needed;
• why the CFPB needs to act instead of leaving the issue to private markets or state, local, or tribal authorities;
• whether the rule overlaps with, conflicts with, or duplicates other federal rules or orders;
• if there is overlap or conflict, why the rule is still justified and how the CFPB plans to reduce the burden;
• the expected costs and benefits, both direct and indirect;
• compliance costs for regulated entities, including small businesses;
• effects on economic activity, competition, efficiency, and capital formation;
• administrative and implementation costs;
• costs on state, local, and tribal governments;
• possible alternatives to the proposed rule, including changes to existing rules;
• the costs and benefits of those alternatives;
• how the burden would be shared, including whether consumers or small businesses would be hit harder;
• and, when possible, a statistical range of likely outcomes.

Additional requirements

The bill would also require the CFPB to explain the assumptions behind its analysis and identify any studies or data it used, including whether those studies were peer-reviewed.

If the CFPB believes a proposed rule would raise costs for small businesses, it would have to consult the Small Business Administration’s Office of Advocacy to look for ways to reduce those costs.

The bill also says that if a rule’s measured benefits do not exceed the benefits of available alternatives, or if its benefits do not outweigh its costs, the CFPB must explain why it still wants to move forward.

Overall effect

In practical terms, the bill would make CFPB rule proposals more detailed and more heavily justified before they are issued. It would likely increase the amount of analysis the agency must do before proposing regulations, especially around costs, benefits, duplication with other rules, and impacts on small businesses and consumers.

Relevant Companies

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