These representatives  are to be selected from small businesses, not-for-profit organizations, and  government jurisdictions. In particular, CFPB  must prepare an Initial Regulatory Flexibility Analysis with the following  required elements: a description and estimate, where feasible, of the number of small  entities to which the proposed rule will apply; a description of the projected reporting, recordkeeping, and other  compliance requirements of the proposed rule; an identification, to the extent practicable, of all relevant federal rules  which may duplicate, overlap, or conflict with the proposed rule; a description of any significant alternatives to the proposed rule which  accomplish the stated objectives of applicable statutes and which  minimize any significant economic impact of the proposed rule on  small entities; a description of any projected increase in the cost of credit for small  entities (and, if so, any significant alternatives to the proposed rule  that accomplish the stated objectives of applicable statutes and  minimize any increase in the cost of credit for small entities); and a description of the advice and recommendations of representatives  of small entities relating to the issues described above. CFPB Met Requirements to Solicit, Consider, and Incorporate Small Business Inputs into Rulemakings

		CFPB Met Requirements for Conducting SBREFA Panels

			CFPB Selected and Informed Panel Participants and Solicited Their Input

CFPB, in collaboration with SBA’s Office of Advocacy and OMB’s Office  of Information and Regulatory Affairs, accomplished required steps for  conducting the four panels that we reviewed—including soliciting the input  of small entity representatives at panel meetings. CFPB Addressed Required Elements of Initial and Final Regulatory Flexibility Analyses

CFPB addressed required elements for Initial and Final Regulatory  Flexibility Analyses under the Regulatory Flexibility Act, as amended by  the Dodd-Frank Act, and also for more general rulemaking requirements. Information on Panels Focused on CFPB Proposals and Alternatives

Our review of the rulemaking documents indicates that the discussion of  the rule proposals and alternatives in panel reports, and the Notices of  Proposed Rulemaking, focused on reactions to the proposals and  alternatives that CFPB presented. We  found that some alternatives posed by representatives as part of the  SBREFA panel process were discussed and assessed in the  proposed rule and others were not. They only had to include those that they deemed  significant and consistent with applicable statutes of the proposed rule. The officials also noted that data needed to make a fuller assessment of  some alternatives from small entities were not always available. However,  several mortgage brokers believed their industry was not well- represented. When asked how CFPB’s conduct of the panel meetings could  be improved (question 17), 19 representatives suggested more time or  additional meetings would improve the process. Although most small entity representatives felt  their views were at least partially considered in the rulemakings and most  felt the agency amended its final rule based on their comments, most  representatives expressed disagreement with CFPB’s final rules for  reasons such as increased cost of compliance. Specifically, 7 of the 57  stated they were satisfied with the final rules (question 27). CFPB officials  noted that the rules for which GAO reviewed SBREFA panels were based  on statutory requirements in the Dodd-Frank Act, all involving issues  related to mortgage lending. In its rulemaking process, CFPB is to consider input from multiple sources  and make judgments deemed necessary to accomplish the stated  objectives of applicable statutes. III), CFPB generally agreed with our findings. Appendix I: Objectives, Scope, and Methodology

This report addresses (1) the extent to which the Consumer Financial  Protection Bureau (CFPB) solicited, considered, and incorporated small  entity inputs into its rulemakings; and (2) the views of the small entity  representatives on CFPB’s rulemaking process. As of April 2016, four CFPB rulemaking efforts involving SBREFA panels  had resulted in final rules. Each interview was conducted by a team of at least two  analysts. For rulemakings that require the Consumer Financial Protection Bureau  (CFPB) to convene a Small Business Regulatory Enforcement Fairness  Act (SBREFA) panel, CFPB must assure that small entities have an  opportunity to participate in the rulemaking through reasonable  techniques. Did the materials provided by CFPB prepare you to provide  constructive input during the panel?
Why GAO Did This Study

The Regulatory Flexibility Act, which was amended by the Dodd-Frank Act, requires CFPB to convene Small Business Review Panels (also known as SBREFA panels) for rulemaking efforts that are expected to have a significant economic impact on a substantial number of small entities. These panels are intended to seek direct input early in the rulemaking process from small entities (which can include small businesses, small not-for-profit organizations, and small governmental jurisdictions) that would be impacted by CFPB's rulemakings. This report addresses the extent to which CFPB solicited, considered, and incorporated such inputs into its rulemakings, and the views of small entity representatives on CFPB's rulemaking process.
GAO analyzed and reviewed CFPB's rulemaking processes and documents and conducted semi-structured interviews with 57 of the 69 participants on four panels who agreed to be interviewed. The scope was limited to the four SBREFA panels that had associated final rules as of April 2016.
GAO does not make any recommendations in this report. CFPB generally agreed with our findings.

What GAO Found

The Consumer Financial Protection Bureau (CFPB) has taken steps to solicit, consider, and incorporate inputs from small entities into its rulemaking process, as required by the Regulatory Flexibility Act, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). GAO reviewed documents from the four Small Business Regulatory Enforcement Fairness Act (SBREFA) panels that resulted in final rulemaking as of April 2016 and found CFPB completed required steps for conducting them (see fig.). CFPB addressed required elements for regulatory analyses that are components of the proposed and final rules. Based on a review of selected rules, GAO observed that the discussion of rule proposals and alternatives focused on reactions to proposals and alternatives CFPB presented. Some alternatives that small entity representatives raised at panels were discussed in a significant alternatives section of the proposed rules, while others were not. CFPB officials noted that data needed to make a fuller assessment of some alternatives from small entities were not always available. CFPB officials, consistent with statutory requirements for CFPB rulemakings, also said alternatives that CFPB presents for a panel discussion and in a proposed rule are those they deemed significant and consistent with applicable statutes.
GAO interviewed 57 of the 69 small entity representatives who participated in the four SBREFA panels GAO reviewed and found they generally believed the process was useful but also that it could be improved. More than three-quarters stated the materials CFPB provided helped prepare them to provide constructive input, and two-thirds stated their industry was represented on the panels. However, two-thirds stated not enough time was allotted to discuss at least one of the topics on the panel agenda and a third suggested more time or additional meetings would improve the process. While 36 of 57 stated CFPB at least partially considered their comments in its rulemakings, most representatives expressed disagreement with CFPB's final rules for reasons such as increased cost of compliance. Specifically, 7 of 57 were satisfied with CFPB's final rules. CFPB officials noted that the rules for which GAO reviewed SBREFA panels were based on statutory requirements in the Dodd-Frank Act. In its rulemaking process, CFPB is to consider input from multiple sources and makes judgments deemed necessary to accomplish the stated objectives of applicable statutes.