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Rep. Graves tells CFPB to consider reg burdens costs
WASHINGTON (8/2/12)--Noting that "small businesses are often victims of unintended consequences of regulations," House Small Business Committee Chairman Sam Graves (R-Mo.) called on the Consumer Financial Protection Bureau (CFPB) to consider the costs and burdens that may be imposed on small businesses as it develops new rules.

Graves, who spoke during a Wednesday committee hearing entitled "Know Before You Regulate: The Impact of CFPB Regulations on Small Business," said he hopes to see the CFPB "emphasize the preservation of small businesses" going forward.

CFPB Director Richard Cordray, who was the lone witness at the Wednesday hearing, in a prepared statement said the agency understands the importance of integrating "direct input and advice from small businesses into the CFPB's decision-making process."

The CFPB has "actively and consciously designed a number of mechanisms to seek the input of small businesses to support its rulemaking, supervision, enforcement, consumer education, research, and reporting functions," he said.

The CFPB has held three Small Business Regulatory Enforcement Fairness Act (SBREFA) panel discussions this year to gather comments from small businesses and other entities. The first of these panels focused on the CFPB's project to combine separate Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) disclosures into a single form. Later panels have focused on pending mortgage servicing and mortgage loan origination proposals.

"We responded to every panel recommendation and every major concern raised by the small business participants, whether by adopting the recommendation, changing the proposal, seeking comment on a particular issue, or other action," Cordray said.

The CFPB director said the agency incorporated SBREFA panelist recommendations into the TILA/RESPA proposal, including clearer guidance on how to complete the integrated forms. The agency may also remove certain troublesome disclosures from the final versions of its TILA/RESPA forms, Cordray added.

The feedback the agency has received during discussions of its mortgage servicing and mortgage loan origination proposals has also helped the CFPB "think significantly about the basic premises of proposals under consideration and about alternatives and accommodations for small businesses," Cordray said.

SBREFA panels are "not a 'check the box' kind of exercise but rather a vitally important source of information," he added.

Regulatory burden is also a key concern for credit unions coping with the onslaught of CFPB regulations, and Doug Fecher, president/CEO of Wright-Patt CU, Fairborn, Ohio, recently warned that every dollar a credit union must spend complying with regulatory changes is a dollar it cannot spend to benefit its members.

Testifying on behalf of the Credit Union National Association (CUNA) and his credit union last month, Fecher asked members of the House Oversight and Government Reform Committee financial services subcommittee to "aggressively urge" the CFPB to use its exemption authority so the weight of compounding rules "that are intended for abusers and the largest financial institutions" does not overburden credit unions. (See related July 25 News Now story: Compliance dollars better spent on members, CUNA testifies)


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