Legislation scheduled for a vote in the House this week would undermine consumer protections, take aim at fettering the most prominent institution created by post-2008 financial reform, and place new financial burdens on independent regulatory agencies, according to a report by the Congressional Budget Office.
And although the bill is being touted by small government conservatives, the study, which was released Tuesday, also found that the bill would add $1.8 million annually to the deficit and foist additional costs upon business and consumers.
Sponsored by Rep. Virginia Foxx (R-N.C.), the Unfunded Mandates Information and Transparency Act would hamstring rule-making by requiring regulators to adhere to stringent guidelines and submit additional reviews of proposed regulations to the CBO and other government agencies. It also forces regulators to give industries a heads up and solicit feedback when considering any new rules, giving big business an inside track to defeat any measures they don’t like.
The majority of additional costs, the CBO found, would be shouldered by the cash-strapped Consumer Financial Protection Bureau.
Supporters of the bill say the legislation is necessary to give lawmakers more information about the potential effects of future regulation, but public interest groups are warning that it’s actually a thinly-veiled Trojan Horse.
“[The bill] is the latest effort to cripple regulators’ ability to protect the public interest by loading them down with new paperwork requirements and enabling even more industry lawsuits,” said Lisa Donner, the executive director of Americans for Financial Reform.
“This legislation would be a gift to Wall Street and would invite a resurgence of the reckless practices that caused such enormous economic damage just six years ago,” she added.
The legislation also requires regulators to adopt a new definition of “direct costs” to include metrics such as “forgone business profits, costs passed onto consumers and other entities, and behavioral changes.”
But CBO estimates the bill itself will lead to increased costs that will inevitably be passed onto consumers.
“CBO expects that several independent agencies would increase fees to offset some of the costs of implementing the additional regulatory activities required by the bill. Thus [it] would increase the costs of existing mandates on public and private-sector entities to pay those fees.”
This is not the first time the GOP House has targeted independent regulators with a view of undermining the keystone of Dodd-Frank financial reform. As The Sentinel reported last December, Republicans passed a bill that would add more than $80 million in financial burdens to the CFPB by requiring the agency to respond to thousands of comments from the banking sector every year and providing it with the legal justification for its regulatory activities.
The CFPB’s annual operating budget was roughly $580 million in 2014.
Last year, in a semi-annual report to Congress, the Inspector General for the Federal Reserve’s Board of Governors warned that the CFPB is already facing major management challenge, including “competition for highly qualified staff with the unique skill sets needed to fulfill its mission.”
The Unfunded Mandates Information and Transparency Act is scheduled for a vote on the House floor on Wednesday.
