The Dodd-Frank Consumer Financial Protection Act gave the new Consumer Financial Protection Bureau (CFPB) the honor of being one of only three agencies subject to a statute that is aimed at providing extra protection for small businesses.
This little-known law, the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), requires covered agencies – the Environmental Protection Agency (EPA), the Occupational Safety and Health Administration (OSHA), and now the CFPB as well – to convene a special panel whenever one of their proposed rules may have a significant impact on a substantial number of small entities.
The purpose of these SBREFA panels is to force the agency to take a focused look at the proposed rule’s effects on small businesses and require it to consider whether it is possible to achieve its regulatory objectives using approaches that are less burdensome to small entities. Since the CFPB’s director took office in January 2012 and the CFPB began promulgating its own regulations, three rules have been found to meet the requirement to convene panels (TILA/RESPA, mortgage servicing, and loan origination standards). The panel process has been far from ideal, but as it has gotten underway, one key question has particularly stood out: what is meant by the term “small” when it comes to designating “Small Entity Representatives” (SERs) who meet with the official government-agency panel members and are expected to represent particular small-business sectors affected by the proposed rule? For further reading click here.
More Resources on the Dodd-Frank Act
For additional information, please visit Pepper’s Financial Service Reform Resource Center.