H.R.2183 - CFPB Dual Mandate and Economic Analysis Act (119th Congress)
Summary
H.R.2183, the CFPB Dual Mandate and Economic Analysis Act, seeks to amend the Consumer Financial Protection Act of 2010. The bill aims to modify the CFPB's purpose by removing 'competitive' from its mandate and adding a requirement to strengthen private sector participation without government interference. It also establishes an Office of Economic Analysis within the CFPB.
The office would review and assess the impact of proposed guidance, orders, rules, and regulations on consumer choice, price, and access to credit products. Furthermore, it mandates retrospective reviews of existing rules to measure their success in solving intended problems.
Finally, the bill requires the CFPB Director to consider the Office of Economic Analysis's reviews and assessments before issuing any guidance, order, rule, or regulation, and to publicly explain any disagreements. It also requires the Director to identify the problem each rule seeks to solve and specify metrics for measuring success, including impacts on consumer access and cost.
Expected Effects
The bill would likely lead to a shift in the CFPB's focus, potentially emphasizing market-based solutions and reducing regulatory burdens on financial institutions. The establishment of the Office of Economic Analysis could result in more rigorous cost-benefit analyses of CFPB regulations.
This could lead to fewer or less stringent regulations, impacting consumer protections. The changes could also affect the availability and cost of financial products and services for consumers.
Overall, the bill's effect would be to re-balance the CFPB's priorities, potentially leading to a more industry-friendly regulatory environment.
Potential Benefits
- Increased Private Sector Participation: The bill's emphasis on strengthening private sector participation could foster innovation and efficiency in financial markets.
- Enhanced Economic Analysis: The Office of Economic Analysis could provide valuable insights into the impact of CFPB regulations, leading to more informed policymaking.
- Greater Transparency: The requirement for the Director to explain disagreements with the Office of Economic Analysis could increase transparency and accountability.
- Clearer Rulemaking Objectives: The mandate to identify problems and metrics for success could improve the effectiveness of CFPB regulations.
- Potential for Reduced Regulatory Burden: By requiring economic analysis, the bill could lead to the removal of ineffective or overly burdensome regulations.
Most Benefited Areas:
Potential Disadvantages
- Weakened Consumer Protections: Removing 'competitive' from the CFPB's mandate and emphasizing private sector participation could lead to weaker consumer protections.
- Reduced Access to Redress: Fewer regulations could result in less recourse for consumers harmed by unfair or deceptive financial practices.
- Potential for Regulatory Capture: The emphasis on economic analysis could be used to justify deregulation that benefits industry at the expense of consumers.
- Increased Complexity: The additional layers of review and analysis could slow down the rulemaking process and make it more complex.
- Uncertainty: The impact of the bill on consumer choice, price, and access to credit products is uncertain and could vary depending on how it is implemented.
Most Disadvantaged Areas:
Constitutional Alignment
The bill's constitutional alignment is primarily related to the delegation of powers to the CFPB and the due process rights of regulated entities. Article I, Section 1 vests legislative powers in Congress, raising questions about the extent to which Congress can delegate regulatory authority to agencies like the CFPB.
The establishment of the Office of Economic Analysis and the requirement for the Director to consider its reviews could be seen as promoting more reasoned decision-making and protecting the due process rights of regulated entities. However, the changes to the CFPB's mandate could also be challenged as undermining the agency's ability to protect consumers, potentially conflicting with the general welfare clause of the Constitution's preamble.
Overall, the bill's constitutional alignment is mixed, with arguments to be made on both sides depending on one's interpretation of the scope of congressional power and the balance between consumer protection and economic freedom.
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).