Cost-Benefit Analysis Prepared for presentation to

Transcript:Cost-Benefit Analysis Prepared for presentation to:
Cost-Benefit Analysis Prepared for presentation to the Academic Research Council | September 24th, 2020 Disclaimer This presentation is being made by Consumer Financial Protection Bureau representatives on behalf of the Bureau. It does not constitute legal interpretation, guidance, or advice of the Consumer Financial Protection Bureau. This document was used in support of a live discussion. As such, it does not necessarily express the entirety of that discussion nor the relative emphasis of topics therein. 2 Dodd-Frank Act In substantive rulemakings, Section 1022(b) of the Dodd-Frank Act requires the CFPB to consider: The potential benefits and costs to consumers and covered persons; The potential reduction of access by consumers to consumer financial products or services; The impact on consumers in rural areas; The impact on insured depository institutions or credit unions with total assets of $10 billion or less. 3 Dodd-Frank Act (continued) Section 1022(d) of the Dodd-Frank Act requires the CFPB to conduct an assessment of each significant rule or order adopted by the Bureau under Federal consumer financial law. The Bureau must publish a report of the assessment not later than five years after the effective date of such rule or order. The assessment must address, among other relevant factors, the rule or order's effectiveness in meeting the purposes and objectives of title X of the Dodd-Frank Act and the specific goals stated by the Bureau. The assessment must reflect available evidence and any data that the Bureau reasonably may collect. Before publishing a report of its assessment, the Bureau must invite public comment on recommendations for modifying, expanding, or eliminating the rule or order. 4 Bureau Practice The Bureau established practices in early 2012 to meet the Section 1022(b) cost-benefit requirement in Dodd-Frank. These practices include: Staffing teams in substantive rulemakings with economists and market experts as well as attorneys and integrating the consideration of benefits, costs and impacts into the rulemaking process; Making the Office of Research accountable for the analyses required by Section 1022(b); 5 Bureau Practice (continued) Publishing with proposed and final substantive rules a Section 1022(b) analysis that reviews significant regulatory requirements for the expected benefits, costs and impacts specified in that section and which meets general standards for cost-benefit analysis, such as: Using an explicit baseline consistently throughout the analysis, Considering the effects of significant alternatives to the rule, Quantifying and monetizing the costs and benefits where appropriate and reasonably feasible to