The CFPB does a better job of assessing the impact of rules on small entities than many of the financial regulators, but the agency still can improve the process, the Government Accountability Office said in a new report.

The report does not include the NCUA but does include several other regulatory agencies.

Under the Regulatory Flexibility Act, regulators must assess the potential impact of a rule on small entities and consider alternatives that may reduce the burden. The agency may certify that a particular rule would not have a significant impact on small businesses. The agencies must include its methodology in making its assessments.

For several agencies, such as the Office of the Comptroller of the Currency and the FDIC, GAO said agencies lacked a great deal of data.

“CFPB's regulatory flexibility analyses generally included all required components,” GAO said.

However, for three of the seven rules GAO examined, the rules did not assess the estimated compliance cost for small entities.

And the GAO said, “Of the analyses that included cost estimates, several did not quantify all identified costs or explain why such estimates were not available.”

The CFPB has several small business review panels that assist the agency in such tasks.

“For CFPB rules that had regulatory flexibility analyses, documentation included RFA-required reports summarizing the results of Small Business Review Panel, GAO said. “Staff from the other regulators produced documentation for fewer or no rules and the documents they provided were largely limited and informal.”

For those other regulators, the documentation generally consisted of e-mails between agency staff and information about the number of entities affected.

Still, the GAO said that the CFPB did not include all the required information. For instance, the CFPB did not include its sources and methodology for certifying that a rule would not affect small business.

NCUA Chairman J. Mark McWatters complained last year that the CFPB did not do a good job of assessing whether credit unions should be exempt from its rules.

Those sentiments were echoed in a June letter that CUNA President/CEO Jim Nussle sent to then-Director Richard Cordray.

“Regrettably…credit unions continue to tell us that the accommodations the CFPB continues to cite are not sufficient exemptions and they do not fully take into consideration the size, complexity, structure, or mission of all credit unions,” Nussle wrote.

Cordray has resigned as director and Office of Management and Budget Director Mick Mulvaney is serving as the agency's acting director. So far, credit union trade groups have said that they are pleased with many of Mulvaney's decisions.

Instant Insights /

Despite CU Gripes, CFPB Doing Better Job Than Many Regulators: GAO

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