Financial Regulatory Responsibility Act of 2011- Prohibits a federal financial regulatory agency from issuing notices of proposed or final rulemakings unless specified analyses have been included in them.
Prohibits an agency from publishing a notice of final rulemaking if it determines that the quantified costs are greater than the quantified benefits.
Requires an agency to make available on its public website sufficient information about the data, methodologies, and assumptions underlying its analyses so that its analytical results are capable of being substantially reproduced.
Requires the chief economist of an agency, within five years after publication in the Federal Register of a notice of final rulemaking, to report to certain congressional committees on the economic impact of the subject regulation, including its direct and indirect costs and benefits.
Requires each federal agency to develop, report to certain congressional committees, and post on its public website a plan to modify, streamline, expand, or repeal existing regulations so as to make the agency's regulatory program more effective or less burdensome in achieving its regulatory objectives.
Authorizes judicial review for a person adversely affected or aggrieved by a regulation.
Establishes the Chief Economists Council to report to certain congressional committees on activities of the financial regulatory agencies.
Requires the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to report separately to certain congressional committees their plans for subjecting to the requirements of this Act the Public Company Accounting Oversight Board, the Municipal Securities Rulemaking Board, and registered national securities associations on the one hand, and registered futures associations on the other.
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 1615 Introduced in Senate (IS)]
112th CONGRESS
1st Session
S. 1615
To require enhanced economic analysis and justification of regulations
proposed by certain Federal banking, housing, securities, and commodity
regulators, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 22, 2011
Mr. Shelby (for himself, Mr. Crapo, Mr. Corker, Mr. DeMint, Mr. Vitter,
Mr. Johanns, Mr. Toomey, Mr. Kirk, Mr. Moran, and Mr. Wicker)
introduced the following bill; which was read twice and referred to the
Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To require enhanced economic analysis and justification of regulations
proposed by certain Federal banking, housing, securities, and commodity
regulators, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Financial Regulatory Responsibility
Act of 2011''.
SEC. 2. DEFINITIONS.
As used in this Act--
(1) the term ``agency'' means the Board of Governors of the
Federal Reserve System, the Bureau of Consumer Financial
Protection, the Commodity Futures Trading Commission, the
Federal Deposit Insurance Corporation, the Federal Housing
Finance Agency, the Financial Stability Oversight Council, the
Office of the Comptroller of the Currency, the Office of
Financial Research, the National Credit Union Administration,
and the Securities and Exchange Commission;
(2) the term ``chief economist'' means--
(A) with respect to the Board of Governors of the
Federal Reserve System, the Director of the Division of
Research and Statistics, or an employee of the agency
with comparable authority;
(B) with respect to the Bureau of Consumer
Financial Protection, the Assistant Director for
Research, or an employee of the agency with comparable
authority;
(C) with respect to the Commodity Futures Trading
Commission, the Chief Economist, or an employee of the
agency with comparable authority;
(D) with respect to the Federal Deposit Insurance
Corporation, the Director of the Division of Insurance
and Research, or an employee of the agency with
comparable authority;
(E) with respect to the Federal Housing Finance
Agency, the Chief Economist, or an employee of the
agency with comparable authority;
(F) with respect to the Financial Stability
Oversight Council, the Chief Economist, or an employee
of the agency with comparable authority;
(G) with respect to the Office of the Comptroller
of the Currency, the Director for Policy Analysis, or
an employee of the agency with comparable authority;
(H) with respect to the Office of Financial
Research, the Director, or an employee of the agency
with comparable authority;
(I) with respect to the National Credit Union
Administration, the Chief Economist, or an employee of
the agency with comparable authority; and
(J) with respect to the Securities and Exchange
Commission, the Director of the Division of Risk,
Strategy, and Financial Innovation, or an employee of
the agency with comparable authority;
(3) the term ``Council'' means the Chief Economists Council
established under section 9; and
(4) the term ``regulation''--
(A) means an agency statement of general
applicability and future effect that is designed to
implement, interpret, or prescribe law or policy or to
describe the procedure or practice requirements of an
agency, including rules, orders of general
applicability, interpretive releases, and other
statements of general applicability that the agency
intends to have the force and effect of law;
(B) does not include--
(i) a regulation issued in accordance with
the formal rulemaking provisions of section 556
or 557 of title 5, United States Code;
(ii) a regulation that is limited to agency
organization, management, or personnel matters;
(iii) a regulation promulgated pursuant to
statutory authority that expressly prohibits
compliance with this provision;
(iv) a regulation that is certified by the
agency to be an emergency action, if such
certification is published in the Federal
Register; or
(v) a regulation that is promulgated by the
Board of Governors of the Federal Reserve
System or the Federal Open Market Committee
under section 10A, 10B, 13, 13A, or 19 of the
Federal Reserve Act, or any of subsections (a)
through (f) of section 14 of that Act.
SEC. 3. REQUIRED REGULATORY ANALYSIS.
(a) Requirements for Notices of Proposed Rulemaking.--An agency may
not issue a notice of proposed rulemaking unless the agency includes in
the notice of proposed rulemaking an analysis that contains, at a
minimum, with respect to each regulation that is being proposed--
(1) an identification of the need for the regulation and
the regulatory objective, including identification of the
nature and significance of the market failure, regulatory
failure, or other problem that necessitates the regulation;
(2) an explanation of why the private market or State,
local, or tribal authorities cannot adequately address the
identified market failure or other problem;
(3) an analysis of the adverse impacts to regulated
entities, other market participants, economic activity, or
agency effectiveness that are engendered by the regulation and
the magnitude of such adverse impacts;
(4) a quantitative and qualitative assessment of all
anticipated direct and indirect costs and benefits of the
regulation (as compared to a benchmark that assumes the absence
of the regulation), including--
(A) compliance costs;
(B) effects on economic activity, net job creation
(excluding jobs related to ensuring compliance with the
regulation), efficiency, competition, and capital
formation;
(C) regulatory administrative costs; and
(D) costs imposed by the regulation on State,
local, or tribal governments or other regulatory
authorities;
(5) if quantified benefits do not outweigh quantitative
costs, a justification for the regulation;
(6) identification and assessment of all available
alternatives to the regulation, including modification of an
existing regulation or statute, together with--
(A) an explanation of why the regulation meets the
objectives of the regulation more effectively than the
alternatives, and if the agency is proposing multiple
alternatives, an explanation of why a notice of
proposed rulemaking, rather than an advanced notice of
proposed rulemaking, is appropriate; and
(B) if the regulation is not a pilot program, an
explanation of why a pilot program is not appropriate;
(7) if the regulation specifies the behavior or manner of
compliance, an explanation of why the agency did not instead
specify performance objectives;
(8) an assessment of how the burden imposed by the
regulation will be distributed among market participants,
including whether consumers, investors, or small businesses
will be disproportionately burdened;
(9) an assessment of the extent to which the regulation is
inconsistent, incompatible, or duplicative with the existing
regulations of the agency or those of other domestic and
international regulatory authorities with overlapping
jurisdiction;
(10) a description of any studies, surveys, or other data
relied upon in preparing the analysis;
(11) an assessment of the degree to which the key
assumptions underlying the analysis are subject to uncertainty;
and
(12) an explanation of predicted changes in market
structure and infrastructure and in behavior by market
participants, including consumers and investors, assuming that
they will pursue their economic interests.
(b) Requirements for Notices of Final Rulemaking.--
(1) In general.--Notwithstanding any other provision of
law, an agency may not issue a notice of final rulemaking with
respect to a regulation unless the agency--
(A) has issued a notice of proposed rulemaking for
the relevant regulation;
(B) has conducted and includes in the notice of
final rulemaking an analysis that contains, at a
minimum, the elements required under subsection (a);
and
(C) includes in the notice of final rulemaking
regulatory impact metrics selected by the chief
economist to be used in preparing the report required
pursuant to section 6.
(2) Consideration of comments.--The agency shall
incorporate in the elements described in paragraph (1)(B) the
data and analyses provided to the agency by commenters during
the comment period, or explain why the data or analyses are not
being incorporated.
(3) Comment period.--An agency shall not publish a notice
of final rulemaking with respect to a regulation, unless the
agency--
(A) has allowed at least 90 days from the date of
publication in the Federal Register of the notice of
proposed rulemaking for the submission of public
comments; or
(B) includes in the notice of final rulemaking an
explanation of why the agency was not able to provide a
90-day comment period.
(4) Prohibited rules.--
(A) In general.--An agency may not publish a notice
of final rulemaking if the agency, in its analysis
under paragraph (1)(B), determines that the quantified
costs are greater than the quantified benefits under
subsection (a)(5).
(B) Publication of analysis.--If the agency is
precluded by subparagraph (A) from publishing a notice
of final rulemaking, the agency shall publish in the
Federal Register and on the public website of the
agency its analysis under paragraph (1)(B), and provide
the analysis to each House of Congress.
(C) Congressional waiver.--If the agency is
precluded by subparagraph (A) from publishing a notice
of final rulemaking, Congress, by joint resolution
pursuant to the procedures set forth for joint
resolutions in section 802 of title 5, United States
Code, may direct the agency to publish a notice of
final rulemaking notwithstanding the prohibition
contained in subparagraph (A). In applying section 802
of title 5, United States Code, for purposes of this
paragraph, section 802(e)(2) shall not apply and the
term--
(i) ``joint resolution'' or ``joint
resolution described in subsection (a)'' means
only a joint resolution introduced during the
period beginning on the submission or
publication date and ending 60 days thereafter
(excluding days either House of Congress is
adjourned for more than 3 days during a session
of Congress), the matter after the resolving
clause of which is as follows: ``That Congress
directs, notwithstanding the prohibition
contained in (3)(b)(4)(A) of the Financial
Regulatory Responsibility Act of 2011, the __
to publish the notice of final rulemaking for
the regulation or regulations that were the
subject of the analysis submitted by the __ to
Congress on __.'' (The blank spaces being
appropriately filled in.); and
(ii) ``submission or publication date''
means--
(I) the date on which the analysis
under paragraph (1)(B) is submitted to
Congress under paragraph (4)(B); or
(II) if the analysis is submitted
to Congress less than 60 session days
or 60 legislative days before the date
on which the Congress adjourns a
session of Congress, the date on which
the same or succeeding Congress first
convenes its next session.
SEC. 4. RULE OF CONSTRUCTION.
For purposes of the Paperwork Reduction Act (44 U.S.C. 3501 et
seq.), obtaining, causing to be obtained, or soliciting information for
purposes of complying with section 3 with respect to a proposed
rulemaking shall not be construed to be a collection of information,
provided that the agency has first issued an advanced notice of
proposed rulemaking in connection with the regulation, identifies that
advanced notice of proposed rulemaking in its solicitation of
information, and informs the person from whom the information is
obtained or solicited that the provision of information is voluntary.
SEC. 5. PUBLIC AVAILABILITY OF DATA AND REGULATORY ANALYSIS.
(a) In General.--At or before the commencement of the public
comment period with respect to a regulation, the agency shall make
available on its public website sufficient information about the data,
methodologies, and assumptions underlying the analyses performed
pursuant to section 3 so that the analytical results of the agency are
capable of being substantially reproduced, subject to an acceptable
degree of imprecision or error.
(b) Confidentiality.--The agency shall comply with subsection (a)
in a manner that preserves the confidentiality of nonpublic
information, including confidential trade secrets, confidential
commercial or financial information, and confidential information about
positions, transactions, or business practices.
SEC. 6. FIVE-YEAR REGULATORY IMPACT ANALYSIS.
(a) In General.--Not later than 5 years after the date of
publication in the Federal Register of a notice of final rulemaking,
the chief economist of the agency shall issue a report that examines
the economic impact of the subject regulation, including the direct and
indirect costs and benefits of the regulation.
(b) Regulatory Impact Metrics.--In preparing the report required by
subsection (a), the chief economist shall employ the regulatory impact
metrics included in the notice of final rulemaking pursuant to section
3(b)(1)(C).
(c) Reproducibility.--The report shall include the data,
methodologies, and assumptions underlying the evaluation so that the
agency's analytical results are capable of being substantially
reproduced, subject to an acceptable degree of imprecision or error.
(d) Confidentiality.--The agency shall comply with subsection (c)
in a manner that preserves the confidentiality of nonpublic
information, including confidential trade secrets, confidential
commercial or financial information, and confidential information about
positions, transactions, or business practices.
(e) Report.--The agency shall submit the report required by
subsection (a) to the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services of the House of
Representatives and post it on the public website of the agency. The
Commodity Futures Trading Commission shall also submit its report to
the Committee on Agriculture, Nutrition, and Forestry of the Senate and
the Committee on Agriculture of the House of Representatives.
SEC. 7. RETROSPECTIVE REVIEW OF EXISTING RULES.
(a) Regulatory Improvement Plan.--Not later than 1 year after the
date of enactment of this Act and every 5 years thereafter, each agency
shall develop, submit to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services of the
House of Representatives, and post on the public website of the agency
a plan, consistent with law and its resources and regulatory
priorities, under which the agency will modify, streamline, expand, or
repeal existing regulations so as to make the regulatory program of the
agency more effective or less burdensome in achieving the regulatory
objectives. The Commodity Futures Trading Commission shall also submit
its plan to the Committee on Agriculture, Nutrition, and Forestry of
the Senate and the Committee on Agriculture of the House of
Representatives.
(b) Implementation Progress Report.--Two years after the date of
submission of each plan required under subsection (a), each agency
shall develop, submit to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services of the
House of Representatives, and post on the public website of the agency
a report of the steps that it has taken to implement the plan, steps
that remain to be taken to implement the plan, and, if any parts of the
plan will not be implemented, reasons for not implementing those parts
of the plan. The Commodity Futures Trading Commission shall also submit
its plan to the Committee on Agriculture, Nutrition, and Forestry of
the Senate and the Committee on Agriculture of the House of
Representatives.
SEC. 8. JUDICIAL REVIEW.
(a) In General.--Notwithstanding any other provision of law, during
the period beginning on the date on which a notice of final rulemaking
for a regulation is published in the Federal Register and ending 1 year
later, a person that is adversely affected or aggrieved by the
regulation is entitled to bring an action in the United States Court of
Appeals for the District of Columbia Circuit for judicial review of
agency compliance with the requirements of section 3.
(b) Stay.--The court may stay the effective date of the regulation
or any provision thereof.
(c) Relief.--If the court finds that an agency has not complied
with the requirements of section 3, the court shall vacate the subject
regulation, unless the agency shows by clear and convincing evidence
that vacating the regulation would result in irreparable harm. Nothing
in this section affects other limitations on judicial review or the
power or duty of the court to dismiss any action or deny relief on any
other appropriate legal or equitable ground.
SEC. 9. CHIEF ECONOMISTS COUNCIL.
(a) Establishment.--There is established the Chief Economists
Council.
(b) Membership.--The Council shall consist of the chief economist
of each agency. The members of the Council shall select the first
chairperson of the Council. Thereafter the position of Chairperson
shall rotate annually among the members of the Council.
(c) Meetings.--The Council shall meet at the call of the
Chairperson, but not less frequently than quarterly.
(d) Report.--One year after the effective date of this Act and
annually thereafter, the Council shall prepare and submit to the
Committee on Banking, Housing, and Urban Affairs and the Committee on
Agriculture, Nutrition, and Forestry of the Senate and the Committee on
Financial Services and the Committee on Agriculture of the House of
Representatives a report on--
(1) the benefits and costs of regulations adopted by the
agencies during the past 12 months;
(2) the regulatory actions planned by the agencies for the
upcoming 12 months;
(3) the cumulative effect of the existing regulations of
the agencies on economic activity, innovation, international
competitiveness of entities regulated by the agencies, and net
job creation (excluding jobs related to ensuring compliance
with the regulation);
(4) the training and qualifications of the persons who
prepared the cost-benefit analyses of each agency during the
past 12 months;
(5) the sufficiency of the resources available to the chief
economists during the past 12 months for the conduct of the
activities required by this Act; and
(6) recommendations for legislative or regulatory action to
enhance the efficiency and effectiveness of financial
regulation in the United States.
SEC. 10. CONFORMING AMENDMENTS.
Section 15(a) of the Commodity Exchange Act (7 U.S.C. 19(a)) is
amended--
(1) by striking paragraph (1);
(2) in paragraph (2), by striking (2) and all that follows
through ``light of--'' and inserting the following:
``(1) Considerations.--Before promulgating a regulation
under this chapter or issuing an order (except as provided in
paragraph (2)), the Commission shall take into consideration--
'';
(3) in paragraph (1), as so redesignated--
(A) in subparagraph (B), by striking ``futures''
and inserting ``the relevant'';
(B) in subparagraph (C), by adding ``and'' at the
end;
(C) in subparagraph (D), by striking ``and'' at the
end; and
(D) by striking subparagraph (E); and
(4) by redesignating paragraph (3) as paragraph (2).
SEC. 11. OTHER REGULATORY ENTITIES.
(a) Securities and Exchange Commission.--Not later than 1 year
after the date of enactment of this Act, the Securities and Exchange
Commission shall provide to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial Services of
the House of Representatives a report setting forth a plan for
subjecting the Public Company Accounting Oversight Board, the Municipal
Securities Rulemaking Board, and any national securities association
registered under section 15A of the Securities Exchange Act of 1934 (15
U.S.C. 78o-4(a)) to the requirements of this Act, other than direct
representation on the Council.
(b) Commodity Futures Trading Commission.--Not later than 1 year
after the date of enactment of this Act, the Commodity Futures Trading
Commission shall provide to the Committee on Banking, Housing, and
Urban Affairs of the Senate, the Committee on Financial Services of the
House of Representatives, the Committee on Agriculture, Nutrition, and
Forestry of the Senate, and the Committee on Agriculture of the House
of Representatives a report setting forth a plan for subjecting any
futures association registered under section 17 of the Commodity
Exchange Act (7 U.S.C. 21) to the requirements of this Act, other than
direct representation on the Council.
SEC. 12. AVOIDANCE OF DUPLICATIVE OR UNNECESSARY ANALYSES.
An agency may perform the analyses required by this Act in
conjunction with, or as a part of, any other agenda or analysis
required by any other provision of law, if such other analysis
satisfies the provisions this Act.
SEC. 13. SEVERABILITY.
If any provision of this Act or the application of any provision of
this Act to any person or circumstance, is held invalid, the
application of such provision to other persons or circumstances, and
the remainder of this Act, shall not be affected thereby.
<all>
Introduced in Senate
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
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