Sponsors (4)
The bill strengthens procedural protections and transparency for small businesses by forcing agencies to consider and justify small-entity impacts, but at the cost of slower rulemaking, higher administrative and legal expenses, and greater risk that consumer or public-interest protections will be delayed, weakened, or litigated.
Small-business owners and small financial institutions (community banks, credit unions): agencies must explicitly consider small-entity impacts and less-burdensome alternatives, which should reduce compliance costs and, in some cases, limit increases in borrowing costs for small firms.
Small-business owners, federal employees, and the public (taxpayers): rulemaking will have stronger documented justifications and explanations when agencies depart from small-entity alternatives, increasing transparency and administrative accountability.
Small-business owners: agencies must explain why small-entity size or limited resources do not justify less-burdensome alternatives, providing clearer procedural protections for small entities in regulatory decisions.
Consumers, the general public, and taxpayers: rulemaking could be slowed or delayed because agencies must perform fuller small-entity analyses and justifications, which may postpone new consumer protections or regulatory actions.
Taxpayers and agency operations: preparing the required analyses and legal justifications will increase administrative and compliance costs for agencies, potentially diverting resources away from enforcement, supervision, or consumer assistance.
Taxpayers, small businesses, and regulated parties: more detailed documentary requirements create additional hooks for litigation, likely increasing legal challenges and litigation costs and delaying implementation of rules.
Based on analysis of 4 sections of legislative text.
Requires CFPB and covered agencies to analyze and document rule impacts on small entities, minimize credit-costs, and justify not adopting small-entity alternatives.
Official title: To impose additional requirements for covered agencies in regulatory flexibility analysis.
Introduced February 26, 2025 by Scott Fitzgerald · Last progress February 26, 2025
Requires the Consumer Financial Protection Bureau and other covered agencies to explicitly consider the effects of proposed rules on small entities and to explain, with factual, policy, and legal support, why small entities’ size and resources do not justify adopting alternatives. Agencies must also describe steps taken to minimize any additional cost of credit for small entities in their final regulatory flexibility analyses. The bill inserts new references to the Regulatory Flexibility Act requirements into CFPB statute and adds stronger justification and disclosure obligations for agencies when they choose not to adopt regulatory alternatives for small entities.