House Committee on Financial Services Chair Jeb Hensarling asserted that the Consumer Financial Protection Bureau ("CFPB") must comply with certain Executive Orders in light of the recent U.S. Court of Appeals opinion in PHH Corp. v. Consumer Financial Protection Bureau. In that case, the Court determined that the CFPB must operate as a "traditional executive agency."
Representative Hensarling argued that the following Executive Orders now apply to the CFPB:
- Executive Order 12866 ("Regulatory Planning and Review"), which mandates that regulators "promulgate only such regulations as are required by law, are necessary to interpret the law, or are made necessary by compelling public need";
- Executive Order 13563 ("Improving Regulations and Regulatory Review"), which, inter alia, requires regulatory agencies to "(1) propose or adopt a regulation only upon a reasonable determination that its benefits justify its costs; (2) tailor regulations to impose the least burden on society; and (3) select regulatory approaches that maximize net benefits"; and
- Executive Order 13132 ("Federalism"), which requires an agency to prepare a "federalism summary impact statement" whenever it issues a rule that has significant implications on federalism.
Representative Hensarling asked the CFPB to provide, no later than October 26, 2016, "written assurance that the CFPB will comply in full with the requirements of relevant Executive Orders prior to issuing any future final rule, including rules governing arbitration agreements; payday, vehicle title, and installment loans; and debt collection."
Commentary / Steven Lofchie
The argument that these Executive Orders are applicable to the CFPB as an "executive agency," raises practical questions. Should the Orders apply retroactively to rules that were adopted by the CFPB already, since the CFPB should not have been operating as an independent agency? Should the CFPB perform a clean review of its prior rulemakings to conform them to the regulatory requirements to which the CFPB should have been subject?
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