Making the CFPB Accountable to Small Businesses Act of 2025
- Sponsor
- Rep. Fitzgerald, Scott [R-WI-5]
- Committees
- Financial Services Committee (primary)
- Last action
- Feb 26, 2025
Bottom line
This bill aims to enhance transparency and accountability in federal rulemaking by requiring agencies to provide more thorough justifications for rules that impact small businesses, particularly when not adopting alternatives to mitigate such impacts.
What it actually does
This bill amends existing federal law to impose additional requirements on certain federal agencies, including the Consumer Financial Protection Bureau (CFPB), regarding their regulatory flexibility analyses. It mandates that these agencies explicitly consider the impact of proposed rules on small entities and provide detailed justifications when they choose not to adopt alternatives that would minimize burdens on small businesses.
Proponents argue
Supporters argue this bill enhances transparency and accountability for federal agencies, ensuring that the economic burden on small businesses is thoroughly considered and justified during the rulemaking process. It prevents agencies from imposing regulations without adequately addressing their disproportionate impact on smaller entities, fostering a more business-friendly regulatory environment.
Opponents contend
Opponents might argue that these additional analytical requirements could unduly burden agencies, slow down the rulemaking process, and potentially lead to less effective consumer protections if agencies are forced to adopt less stringent rules to avoid impacts on small entities, even when those impacts are justified.
The bill is very short and can be read quickly, allowing ample time for stakeholders to understand its provisions.
Section 2
CFPB Regulatory Impact on Small Entities
This section amends the Dodd-Frank Act to explicitly require the Consumer Financial Protection Bureau (CFPB) to consider the impact of its proposed rules on 'small entities' when conducting its rulemaking analysis. This adds a specific requirement to the CFPB's existing obligations to consider costs and benefits, ensuring small business concerns are directly addressed.
Supporters argue
Supporters argue this ensures the CFPB, a powerful regulator, explicitly considers the unique challenges small businesses face, preventing disproportionate burdens and fostering economic growth.
Critics contend
Critics might argue that the CFPB already considers economic impacts and this adds an unnecessary layer of bureaucracy that could delay crucial consumer protection rules.
Tradeoffs
This provision balances the goal of consumer protection with the desire to minimize regulatory burdens on small businesses.
Section 3
Justification for Not Adopting Small Entity Alternatives in Initial Analysis
This section amends the Regulatory Flexibility Act (RFA) to require 'covered agencies' (which include the CFPB) to provide a detailed justification if they do not adopt any alternatives to minimize the impact of a proposed rule on small entities. This justification must be supported by factual, policy, and legal reasons, increasing the burden of proof for agencies.
Section 4
Justification for Not Adopting Small Entity Alternatives in Final Analysis and Cost of Credit
This section amends the RFA to require 'covered agencies' to describe steps taken to minimize additional credit costs for small entities in their final regulatory flexibility analysis. If no significant alternatives for small entities were adopted, the agency must provide a detailed justification, supported by factual, policy, and legal reasons, for why the relative size and resources of small entities should have no bearing on the rule.