NASE Raises Concerns Over Consumer Financial Protection Bureau's Treatment of Small Businesses
In a letter to Director Richard Cordray, NASE along with 48 small business organizations in expressing concerns related to the Consumer Financial Protection Bureau's implementation of small business provisions in the Dodd-Frank Act.
Letter to Director Cordray
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January 24, 2012
The Honorable Richard Cordray
Dear Mr. Cordray:
On behalf of the undersigned small business organizations, we want to raise concerns with the Consumer Financial Protection Bureau’s (“CFPB”) implementation of small business provisions in the Dodd-Frank Act (P.L. 111-203). These important small business provisions provide a process for the CFPB to be mindful of the impact of new regulations on small businesses.
During passage of the Dodd-Frank Act, we supported the Snowe-Pryor amendment, which puts a process into place to require the CFPB to consider the impact of costly regulations on small businesses.1 The Snowe-Pryor language contains two important provisions: 1) requiring the CFPB to publicly consider how rules will impact the cost of credit for small firms; and 2) requiring the CFPB to conduct Small Business Advocacy Review (“SBAR”) panels on rules that will impact small businesses.
The CFPB’s public consideration of how new rules will impact the cost of credit for small business is important because of the struggles small employers face to meet their credit needs. We urge the CFPB to draw a careful balance between providing consumers with added protections while at the same time making sure rules do not negatively impact the cost of credit for small businesses.
The SBAR panel process, originally enacted into law by the 1996 Small Business Regulatory Enforcement Fairness Act (“SBREFA”), lays out a procedure that is intended to minimize regulatory costs on small businesses. These panels are made up of small business representatives and are facilitated by the Small Business
We believe that the CFPB’s first rulemaking will set the tone for how the bureau complies with SBREFA. In following CFPB’s efforts to simplify mortgage closing documents, we are concerned that CFPB may be ignoring the value of SBREFA which will result in undue burden on small businesses. After two decades of consultation by the U.S. Department of Housing and Urban Development (“HUD”) and other agencies on reforms to the Real Estate Settlement Procedures Act (“RESPA”), the CFPB started work on simplifying
Working with small business trade and membership organizations early in the regulatory process will connect the CFPB with small businesses that rely on us for regulatory advice. Interaction with our members and convening SBAR panels early enough in the process for small businesses to make meaningful recommendations are essential for SBREFA to work. SBREFA, if implemented correctly, will allow for the CFPB to present small business-friendly options for comment during a full notice and comment rulemaking. This approach treats trade and membership organizations as partners that share the goal of ensuring any final regulation maximizes benefits while minimizing costs. That was the intention of the Snowe-Pryor amendment.
The undersigned small business trade and membership organizations strongly supported the Snowe-Pryor amendment in the Dodd-Frank law and we urge you to take all necessary steps to make sure the SBREFA process is properly carried out by the CFPB.