H.R.1606 - Making the CFPB Accountable to Small Businesses Act of 2025 (119th Congress)
Summary
H.R. 1606, the "Making the CFPB Accountable to Small Businesses Act of 2025," aims to increase regulatory flexibility analysis requirements for covered agencies, particularly concerning the impact of rules on small businesses. The bill amends Section 1022(b)(2)(A) of the Dodd-Frank Act and Sections 603(d)(1) and 604(a) of Title 5, United States Code. It mandates that agencies consider the impact on small entities during rulemaking and provide justifications when alternatives are not adopted.
The proposed changes require agencies to explicitly analyze the impact of proposed rules on small entities, ensuring that their concerns are considered during the regulatory process. This includes a detailed justification if the agency determines that the size and resources of small entities should not influence the rule.
Ultimately, the bill seeks to make the CFPB more accountable to small businesses by ensuring that regulatory flexibility analyses adequately address the potential burdens on these entities.
Expected Effects
The bill's passage would likely lead to more thorough regulatory flexibility analyses by covered agencies, especially the CFPB, regarding the impact of their rules on small businesses. This could result in the adoption of alternative rules that are less burdensome for small entities.
Agencies may need to allocate additional resources to conduct these analyses and justify their decisions, potentially slowing down the rulemaking process. Small businesses could experience reduced regulatory burdens and increased access to credit.
Overall, the bill aims to balance consumer protection with the needs of small businesses, potentially fostering a more business-friendly regulatory environment.
Potential Benefits
- Reduced Regulatory Burden: Small businesses may face fewer overly burdensome regulations due to increased scrutiny and consideration during the rulemaking process.
- Increased Access to Credit: The bill aims to minimize additional credit costs for small entities, potentially improving their access to capital.
- Enhanced Transparency: The requirement for detailed justifications when alternatives are not adopted increases transparency in the regulatory process.
- Greater Accountability: The CFPB would be more accountable to small businesses, fostering a more balanced regulatory approach.
- Economic Growth: Reduced regulatory burdens on small businesses could stimulate economic growth and job creation.
Most Benefited Areas:
Potential Disadvantages
- Increased Agency Costs: Agencies may incur additional costs to conduct more thorough regulatory flexibility analyses.
- Slower Rulemaking Process: The increased scrutiny and justification requirements could slow down the rulemaking process.
- Potential for Loopholes: The focus on small business impact could create loopholes that larger entities might exploit.
- Unintended Consequences: Changes to Dodd-Frank could have unforeseen impacts on consumer protection.
- Complexity: The added requirements could make the regulatory process more complex and difficult to navigate.
Constitutional Alignment
The bill's focus on regulatory flexibility and consideration of small business impacts aligns with the Commerce Clause (Article I, Section 8), which grants Congress the power to regulate commerce. By ensuring regulations are not overly burdensome, the bill could promote economic activity.
The bill does not appear to infringe upon any specific individual rights or liberties protected by the Bill of Rights. The emphasis on due process and fair consideration of different perspectives aligns with the spirit of the Fifth Amendment.
However, some might argue that altering Dodd-Frank could potentially impact consumer protection, raising concerns about the government's role in promoting the general welfare, as stated in the Preamble of the Constitution.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).