Legislation was introduced this week that would make the Consumer Financial Protection Bureau (CFPB) subject to new a regulatory process. U.S. Sen. Mike Crapo (R-Idaho) brought forth a bill that would make the CFPB eligible for review under the 10-year regulatory review. Under the current rules, both the CFPB and Dodd-Frank are exempt from review.
According to Crapo, the current regulatory framework has discouraged the creation of new small banks and credit unions. In 1996, the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) was designed to consider how to reduce the regulatory burden on financial institutions in the best way possible. The first EGRPRA review was submitted to Congress in 2007. That report specifically discussed consumer financial regulations and recently adopted rules and helped identify unnecessary burdens that banking agencies worked together to try and minimize.
“Rather than predetermine which rules should or should not be reviewed, this legislation will require the federal financial regulators to review all existing regulations, including Dodd-Frank and CFPB rules” Crapo said. “Crushed under an ever-increasing regulatory burden, this review is only meaningful if we identify the biggest challenges for community banks and credit unions and provide real solutions.”
This bill would make several changes to the EGRPRA. It would list each agency that is a member of the Federal Financial Institutions Examinations Council separately. This would split the CFPB, National Credit Union Administration (NCUA), Office of the Comptroller Currency, Federal Deposit Insurance Corporation, and Federal Reserve and ensure the CFPB and NCUA are required to take part in the review process. The bill also requires Dodd-Frank to be reviewed.
Ultimately, the bill seeks to expand the review process by broadening the requirement to apply to financial institutions in general as opposed to just insure depository institutions. It is designed to enforce uniform principles and standards to Federal examination of financial institutions.