Crapo: Banking Regulators Sacrifice Quality and Fairness In Exchange For Speed
Senate Banking Committee Republicans say meaningful public comment and economic analysis is needed on Dodd-Frank law
Washington, D.C. - The Dodd-Frank financial reform legislation approved last year by Congress needs careful congressional and public review to ensure it takes into consideration public comments and does not stifle economic recovery, said Idaho Senator Mike Crapo and Republican members of the Senate Banking Committee today. Crapo, Ranking Member Richard Shelby and other Republicans on the committee are requesting that regulators implementing Dodd-Frank rulemakings allow for adequate time for meaningful public comment and conduct rigorous analyses of the costs and benefits of their rules.
The request comes as the Banking Committee plans a Thursday hearing entitled "Oversight of Dodd-Frank Implementation: A Progress Report by the Regulators at the Half-Year Mark". Crapo said the speed of implementing the bills is defeating necessary public input and economic analysis.
"The rules adopted under the Dodd-Frank Act will have a long-term effect on economic growth; they will affect how consumers and businesses obtain credit, allocate capital and manage risk," Crapo said. "Given the volume, complexity and potential consequences of the Dodd-Frank rulemaking, regulators particularly need the input of consumers, who can help to assess effects of rule proposals on job creation and economic growth, provide less costly alternatives and provide useful empirical data for the agency to use in its analyses."
"Regulators must not compound the mistakes of Dodd-Frank by promulgating uninformed rules," said Ranking Member Shelby. "They must listen to the public and fully consider their views."
Crapo said that despite the abbreviated comment periods, Senators have heard many comments from the public who have done their own analysis and identified flaws in agency cost-benefit analyses. He said that, if afforded additional time, more unanticipated consequences of proposed rules could be detected. "I am concerned that some agencies view economic analysis as nothing more than a nuisance or a mere formality," Crapo added. "Given the grave economic conditions we have experienced, implementation of these reforms is too important to get it wrong."
A letter from Crapo and fellow Banking Committee members asks the Treasury Secretary and other regulators implementing Dodd-Frank rulemakings to respond to the following questions:
1. Will your agency provide at least 60 days for public comment on all proposed rules and studies required by the Dodd-Frank Act?
2. Please explain the steps that your agency is taking to ensure that the rules you adopt under the Dodd-Frank Act are the least burdensome way to achieve the statutory mandate. In so doing, provide documentation about how those steps satisfy your obligations under the Administrative Procedure Act and other applicable statutes to conduct cost-benefit and economic impact analyses.
3. Please explain the steps that your agency is taking to ensure that all empirical data and economic analyses submitted by commenters are thoroughly considered before a final rule is adopted.
4. In many instances, the Dodd-Frank Act requires agencies to coordinate rulemaking and promulgate joint rules. What steps are you taking to ensure that your agency is acting in coordination with other agencies charged with adopting related rules? How is your agency coordinating with other agencies that regulate entities over which your agency has been given regulatory jurisdiction by the Dodd-Frank Act?
5. Given the importance of rigorous cost-benefit and economic impact analyses and the need for due consideration of public comments, would additional time for adoption of the Dodd-Frank Act rules improve your rulemaking process and the substance of your final rules?