New bill threatens CFPB's freedom as independent agency
Forces independent agencies to report to Office of Information and Regulatory Affairs
The Consumer Financial Protection Bureau’s freedom as an independent agency to enact regulation could soon change due to a new bill working its way through Congress.
Earlier this month, the House passed (241 to 104) the “OIRA Insight, Reform, and Accountability Act,” H.R. 1009, which would subject independent regulatory agencies to the regulatory review process of the Office of Information and Regulatory Affairs (OIRA) within the Office of Management and Budget, the latest blog post from Ballard Spahr by Barbara Mishkin stated.
The bill, from here, moves on to the Senate Committee on Homeland Security and Governmental Affairs, the blog noted.
The bureau wouldn’t be the only agency affected. Other independent agencies include: the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission and the National Credit Union Administration.
According to the blog, the new bill codifies the definition of “significant regulatory action” and its requirement for OIRA review of new regulations that constitute a “significant regulatory action.”
However, in a major change, it makes the review requirement applicable to both executive and independent agencies.
The role and requirements of independent agencies are getting closely questioned under President Donald Trump since he has already announced presidential actions to reduce regulation, including the regulatory burden created by Dodd-Frank.
Despite the initiative to pull back on regulation, the biggest housing regulator, the CFPB, is considered an independent agency, leaving people questioning whether there would be any regulatory relief in housing.
The Trump administration clarified shortly after he announced the executive order to reduce regulation and control regulatory costs that the CFPB didn’t need to adhere to the action sice it is an independent agency.
The situation, however, wasn’t that simple. As an article in Politico points out on the “Five big questions about Trump’s executive order on regulation,” details are still lacking.
“It seems inconceivable that the Trump administration would exempt agencies like the Environmental Protection Agency or CFPB, which are front and center in the ongoing debate over the economic costs imposed by regulatory agencies,” the article stated.
And then there was also talk about whether the CFPB would simply follow the presidential actions in spirit.
This new proposed bill would put to rest some of the confusion around independent agencies. The chances of the bill passing into law is 31% according to PredictGov.