A new bill has been introduced in the Senate to require additional cost-benefit analysis during rulemaking for the Dodd-Frank Act.
Ranking Member on the Senate Banking Committee Richard Shelby (R-Ala.) sponsored the legislation, which prohibits financial regulators from finalizing rules if the costs outweigh the benefits and mandates that each agency develop plans to modify, eliminate or streamline existing regulations, according to Bloomberg.com.
“In their rush to expand the reach of government into our private markets, congressional Democrats refused to consider the impact of the Dodd-Frank Act on economic growth or job creation,” Shelby said, according to Bloomberg.com.
Republicans have raised concerns regarding the lack of economic consideration during the excessive rulemaking process that financial regulators have struggled to keep up with since the passage of Dodd-Frank last year.
The Securities and Exchange Commission was forced to drop a rule earlier this year after a U.S. court noted the lack of examination on the burden it wool place on firms.
In June, JPMorgan Chase CEO Jamie Dimon focused attention on the issue when he publicly confronted Federal Reserve Chairman Ben Bernanke at an American Bankers Association conference on international economics in Atlanta.
“We know there are 300 rules coming,” Dimon said to Bernanke, according to Bloomberg.com. “Has anyone bothered to study the cumulative effect of all these things?”
If Shelby’s bill is approved, it would apply to 10 federal agencies, including the Fed and the Commodity Futures Trading Commission.
The majority’s spokesman for the Senate Banking Committee, Sean Oblack, said that the chairman Sen. Tim Johnson (D-S.D.) looks forward to reading the bill.
“But it is unfortunate that they chose not to consult with Democrats before introduction,” Oblack said, Bloomberg.com reports. “The Dodd-Frank Act and other existing laws already require a significant number of cost-benefit analyses, and we hope to avoid adding duplicative layers of bureaucracy that would tie regulators’ hands.”