Following his testimony on March 29 before the Financial Services Committee of the U.S. House of Representatives, the chairs of two of the Committee's Subcommittees have requested additional information from Richard Cordray, Director of the Consumer Financial Protection Bureau ("CFPB"). In a letter to Mr. Cordray, the Chairman of the Subcommittee on Oversight and Investigations, Representative Randy Neugebauer (R-Tex.), and the Chairman of the Subcommittee on Financial Institutions and Consumer Credit, Representative Shelley Moore Capito (R-W.Va.), have requested information about how the CFPB's approach for rulemaking. The authors want "an assurance that the CFPB will conduct rigorous, transparent cost-benefit analysis whenever it drafts a new rule."
Specifically, the letter asks about the following:
- Whether the CFPB believes that the Dodd Frank Act imposes a statutory obligation for the CFPB to quantify the costs and benefits of a rule or to state why it could not quantify those costs and benefits. Further, if the CFPB can determine the costs and benefits, whether it would commit to adopting a rule only if the economic benefits outweigh its costs.
- Whether the CFPB will commit to request comments regarding the adequacy of data, methodologies, and assumptions used by the CFPB in carrying out any cost-benefit analysis in support of a proposed rule.
- Whether the CFPB is an "independent regulatory agency" for purposes of Executive Order 12866, which imposes requirements for rulemaking activity, but excludes independent regulatory agencies from certain provisions. The letter also requests information about whether and how the CFPB would implement E.O. 12866 and subsequent executive orders.
- Which rules would constitute "significant rules" and, therefore, require evaluation five years after the rule's effective date.
- What policies and procedures the CFPB has in place to ensure that certain information about a "major" rule gets submitted to Congress.
Similar to several comments from Republicans during Mr. Cordray's testimony, the letter characterizes his recess appointment as "controversial" and questions the CFPB's legal authority to act. Mr. Cordray has seemed unaffected by such comments as the CFPB moves forward with its non-bank supervision program, focus on payday loans, and several rulemaking activities.