Transparency in CFPB Cost-Benefit Analysis Act
- Sponsor
- Sen. Kennedy, John [R-LA]
- Committees
- Banking, Housing, and Urban Affairs Committee (primary)
- Last action
- Sep 30, 2026
Bottom line
The bill significantly increases the analytical and procedural hurdles for the CFPB's rulemaking process, aiming to enhance transparency and accountability regarding the economic impact of its regulations.
What it actually does
This bill amends the Consumer Financial Protection Act of 2010 to impose extensive new rulemaking requirements on the Bureau of Consumer Financial Protection (CFPB). It mandates that all proposed regulations include detailed cost-benefit analyses, examinations of alternatives, assessments of duplicative regulations, and consultations with the Small Business Administration (SBA) if small businesses are impacted. The bill also requires explicit justification if a regulation's quantified costs outweigh its benefits or if better alternatives exist.
Proponents argue
Proponents argue that this bill will lead to more thoughtful, efficient, and less burdensome regulations by requiring the CFPB to conduct rigorous cost-benefit analyses, consider alternatives, and actively seek ways to minimize impacts on small businesses. They contend it enhances transparency and accountability, ensuring that regulatory actions are justified and do not inadvertently harm economic activity or competition.
Opponents contend
Opponents might argue that these additional requirements could create significant bureaucratic obstacles, slowing down or hindering the CFPB's ability to issue timely and necessary consumer protections. They may contend that the CFPB already considers economic impacts and that these new mandates are excessive, potentially being exploited to delay or block crucial regulations designed to safeguard consumers.
The bill text is very concise and can be read quickly to grasp its core provisions, though understanding the full implications requires deeper analysis.
Section 2, amending 12 U.S.C. 5512(b) by adding paragraph (5)(A)(i)-(iv)
Mandated Publication of Rulemaking Justification and Duplication Assessment
This provision requires the CFPB to publish every notice of proposed rulemaking in the Federal Register, including a statement of the need for the regulation, an explanation of why the private market or other authorities cannot adequately address the problem, and an assessment of whether the proposed regulation is duplicative or inconsistent with other federal regulations. If duplication exists, the CFPB must discuss its justification, coexistence, and plans to reduce associated regulatory burden.
Supporters argue
Supporters argue this ensures the CFPB thoroughly justifies its regulatory actions and considers broader impacts before imposing new rules, leading to better-informed and more effective regulations that avoid unnecessary overlap.
Critics contend
Critics might contend that these requirements add unnecessary bureaucratic hurdles, potentially delaying critical consumer protections and making the rulemaking process overly cumbersome.
Tradeoffs
Balances the desire for thorough regulatory analysis and transparency against the potential for increased administrative burden and delays in issuing consumer protection rules.
Section 2, amending 12 U.S.C. 5512(b) by adding paragraph (5)(A)(v)
Comprehensive Quantitative and Qualitative Cost-Benefit Assessment
This clause mandates that the CFPB's proposed rulemaking notices must include a quantitative and qualitative assessment of all anticipated direct and indirect costs and benefits. This includes compliance costs for all regulated entities (including small businesses), effects on economic activity, efficiency, competition, capital formation, and regulatory/administrative costs of implementation, as well as costs imposed on State, local, and tribal entities.
Section 2, amending 12 U.S.C. 5512(b) by adding paragraph (5)(A)(vi)-(viii)
Consideration of Alternatives and Small Business Consultation
This section requires the CFPB to identify reasonable alternatives to proposed regulations, including modifying existing ones, and to analyze their costs and benefits. Crucially, if a proposed regulation would increase costs for small businesses, the CFPB must consult with the Office of Advocacy within the Small Business Administration (SBA) to find ways to minimize these costs.
Section 2, amending 12 U.S.C. 5512(b) by adding paragraph (5)(A)(ix)-(x)
Justification for Costly or Less Beneficial Regulations
This provision requires the CFPB to provide a specific justification if the quantified net benefits of a proposed action do not outweigh the quantified net benefits of alternatives, or if the quantified benefits of the regulation do not outweigh its quantified costs. This ensures transparency when the economic analysis does not clearly favor the proposed rule.
Section 2, amending 12 U.S.C. 5512(b) by adding paragraph (5)(A)(xi)-(xii)
Assessment of Burden Distribution and Outcome Probability
This mandates an assessment of how the regulatory burden will be distributed, specifically noting if consumers or small businesses will be disproportionately affected. Additionally, when feasible, the CFPB must use appropriate statistical techniques to provide a probability distribution of the relevant outcomes of the proposed regulation.
Section 2, amending 12 U.S.C. 5512(b) by adding paragraph (5)(B)
Disclosure of Underlying Assumptions and Peer-Reviewed Studies
This provision requires the CFPB to include a discussion of all underlying assumptions used in its analyses and a description of any studies or data used in preparing such information, noting whether they were peer-reviewed, when presenting the required information for proposed rulemakings.