HR2331-119

What This Bill Does

The Transparency in CFPB Cost-Benefit Analysis Act adds detailed rulemaking requirements to the Consumer Financial Protection Act. Every CFPB notice of proposed rulemaking would have to be published in full in the Federal Register and explain why the Bureau must regulate, why private markets or state, local, or tribal authorities cannot solve the problem, whether the proposal duplicates or conflicts with existing rules, and how the Bureau would reduce any overlapping burden. The Bureau would also have to quantify and describe direct and indirect costs and benefits, identify alternatives, consult SBA's Office of Advocacy when small-business costs rise, justify rules whose quantified benefits do not exceed alternatives or costs, assess distributional burdens on consumers and small businesses, and disclose assumptions and studies.

Who Benefits and How

Small businesses regulated by CFPB rules benefit because the Bureau must analyze compliance costs and consult SBA's Office of Advocacy when a proposal raises their costs. Consumer finance compliance departments benefit from fuller public explanations of costs, alternatives, duplication, and implementation burdens before final rules are issued. State consumer finance authorities benefit from analysis of whether state, local, or tribal authorities can address the underlying problem. Regulatory review advocates benefit from a statutory record requiring cost-benefit comparisons, probability distributions when feasible, and disclosure of assumptions.

Who Bears the Burden and How

CFPB rulemaking staff must produce detailed quantitative and qualitative analyses for every proposed rule. CFPB economists must document assumptions, studies, peer review status, distributional effects, and reasonable alternatives. Consumer protection advocates may face slower CFPB rulemaking when additional analysis is required before consumer safeguards can move forward. SBA Office of Advocacy staff must consult with the CFPB when proposed rules increase small-business costs.

Key Provisions

• Requires CFPB proposed rules to include a need statement, market-failure analysis, duplication review, and regulatory-burden discussion.
• Requires quantitative and qualitative analysis of compliance costs, economic effects, administrative costs, and state, local, or tribal costs.
• Requires identification and cost-benefit analysis of reasonable alternatives, including modifying existing regulations.
• Requires small-business consultation with SBA's Office of Advocacy when CFPB proposals would increase small-business costs.
• Requires disclosure of assumptions, supporting studies, peer-review status, and probability distributions when feasible.