Last week the House of Representatives passed H.R. 1009 – OIRA Insight, Reform, and Accountability Act, 241 - 184. The Act amends title 44 of the U.S. code to require the Office of Information and Regulatory Affairs (OIRA) to review regulations developed by independent agencies like the Consumer Financial Protection Bureau (CFPB). This is currently encouraged but not required, which some see as a loophole.
Each agency will need to provide OIRA with a list of planned regulatory actions, and identify whether each action is “significant.”
A recent insideARM article about Trump’s 2-for-1 regulation rule addresses the concept of “significant” regulation. In short, an action is seemed “significant” if it is likely to have an annual effect on the economy of $100,000,000 or more, or:
- adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities;
- create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;
- materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients therein; or
- raise novel legal or policy issues arising out of legal mandates
For each significant action, OIRA would then be required to determine whether the relevant agency:
- identified and assessed the significance of the problem the regulation is designed to address;
- examined whether to modify any existing regulations or laws that create or contribute to the problem;
- assessed alternatives to direct regulation, including economic incentives to encourage desired behaviors;
- considered risks, costs and benefits, enforcement and compliance, incentives for innovation, consistency, predictability, flexibility, distributive impacts, and equity;
- used the best reasonably obtainable information;
- identified performance objectives rather than behavior or manner of compliance;
- sought comments from, assessed effects on, and harmonized regulations with the functions of state, local, and tribal governments;
- avoided conflicts with or duplication of other existing regulations;
- tailored the regulatory action to impose the least burden on society;
- drafted the regulatory action to be simple and easy to understand;
- complied with requirements under executive orders, statutes, and applicable guidance.
The review is generally required to be completed within 90 days of submission, with a few exceptions detailed. In the case of a significant regulatory action that is a notice of inquiry, advance notice of proposed rulemaking, or other preliminary regulatory action prior to a notice of proposed rulemaking, within 10 business days.
The Act also includes a directive that the OIRA Administrator shall periodically convene conferences with representatives of businesses, nongovernmental organizations, and the public to discuss regulatory issues of common concern.
This bill still needs to pass the Senate, which is possible, though some believe Republicans would be forced to obtain 60 votes to make it happen. Democrats would of course be concerned that this would strip independent agencies of the power needed to protect consumers.
As it relates to debt collection, insideARM thinks it unlikely that rulemaking would be completely derailed, however this might inject a degree of transparency into the process that doesn’t currently exist.
Also, Industry might have to prove that debt collection rules would be deemed “significant.” Based on the estimates in the CFPB’s Outline of Proposals Under Consideration, the bureau does not see this as a $100M+ rule.