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In 2013, when the rulemaking authority of the Consumer Financial Protection Bureau (“CFPB”) vested, the agency faced the task of interpreting its statutory mandate to “consider the potential benefits and costs” of rulemakings. The D.C. Circuit’s 2011 decision in Business Roundtable v. SEC further complicated the CFPB’s statutory construction exercise. The court read a high threshold into the SEC’s statutory mandate to “consider” the effects a new rule would have on “efficiency, competition, and capital formation,” perhaps necessitating quantitative analysis. After the Business Roundtable decision, independent agencies, particularly those financial regulatory agencies charged with rulemaking responsibilities under the Dodd-Frank Wall Street Reform and Consumer Protection Act, faced additional scrutiny regarding their approach to cost-benefit analysis. The CFPB mandate had yet to be interpreted by a court, but the Bureau would likely face litigation challenges or congressional review in the near future.
This case, set in early 2013, requires participants to step into the shoes of new attorneys in the General Counsel’s office of the CFPB. As part of their new role, participants are asked to evaluate the challenges in interpreting the Bureau’s statutory mandate and to develop a procedural approach toward memorializing that interpretation.
Participants will dig deep into the technical aspects of cost-benefit analysis, think broadly about the conceptual requirements of the Bureau’s statutory mandate, and understand the procedural issues that come with developing a Bureau policy on cost-benefit analysis for future rulemaking. After Part 1’s introduction to the problem of cost-benefit analysis, the materials in Part 2 add detail to generate critical thinking to the discussion. In Part 3, participants are given a particular objective, and work together to develop policy guidelines that further their goal. Part 4 culminates the experience by asking participants to consider all of the policy objectives and present a definitive policy recommendation to the Director of the CFPB—in this case, a practitioner volunteering to play the role. A glossary is provided in Part 5.
Table of Contents
This problem set consists of five parts:
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Consumer finance, statutory law, regulations, cost-benefit analysis, rulemaking, government agency
Geographic: United States
Industry: Finance; Government
Event Year Begin: 2013
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