September 15, 2019

Small Business Amendment to Financial Reform Bill Draws Mixed Feelings

This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.

The financial reform bill contains a small-business related amendment that hasn’t received a lot of attention. And it’s either very small-business friendly or very unfriendly, depending on whom you listen to.

Sponsored by Senator Olympia Snowe of Maine, the ranking Republican on the Small Business Committee, it directs the new Consumer Financial Protection Bureau to take into account how proposed regulations would affect the cost of credit to small companies. It also mandates that the bureau be covered by the Small Business Regulatory Enforcement Fairness Act of 1996.

That law, until now, has applied only to the Occupational Safety and Health Administration (OSHA) and Environmental Protection Agency (EPA). It’s aimed at policing proposed regulations that could have a “significant impact on a substantial number of small entities.” In that case, a special government panel has to consult with small businesses who could be affected by the law to see just how they think it could hurt them.


Opponents, like the Consumer Federation, objected to the amendment on the grounds that it required the consumer bureau to consult with the very businesses it regulates. And they said it would slow down the regulatory process, thereby hurting small businesses that need fast access to credit to finance their operations.

On the other hand, such odd organizations as the National Federation of Independent Business–which didn’t much like a whole lot about the rest of the bill–supported the amendment, presumably because they liked including small businesses in the rule-making process.

Who’s right? It’s undoubtedly true that the amendment allows–requires–that the consumer bureau seek input from the folks it’s supposed to regulate. But the bureau doesn’t have to pay attention if it thinks the input lacks merit. The law only says that “Where appropriate, the agency shall modify the proposed rule.” It doesn’t say the bureau is required to modify the proposed rule.

And in the few occasions when a special panel was convened to deal with OSHA and EPA issues, the officials did their work well within the 60-day limit the law requires, according to Rob Mandelbaum in the You’re the Boss blog.

So, on balance, it’s not a bad thing.

This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.

The financial reform bill contains a small-business related amendment that hasn’t received a lot of attention. And it’s either very small-business friendly or very unfriendly, depending on whom you listen to.

Sponsored by Senator Olympia Snowe of Maine, the ranking Republican on the Small Business Committee, it directs the new Consumer Financial Protection Bureau to take into account how proposed regulations would affect the cost of credit to small companies. It also mandates that the bureau be covered by the Small Business Regulatory Enforcement Fairness Act of 1996.

That law, until now, has applied only to the Occupational Safety and Health Administration (OSHA) and Environmental Protection Agency (EPA). It’s aimed at policing proposed regulations that could have a “significant impact on a substantial number of small entities.” In that case, a special government panel has to consult with small businesses who could be affected by the law to see just how they think it could hurt them.


Opponents, like the Consumer Federation, objected to the amendment on the grounds that it required the consumer bureau to consult with the very businesses it regulates. And they said it would slow down the regulatory process, thereby hurting small businesses that need fast access to credit to finance their operations.

On the other hand, such odd organizations as the National Federation of Independent Business–which didn’t much like a whole lot about the rest of the bill–supported the amendment, presumably because they liked including small businesses in the rule-making process.

Who’s right? It’s undoubtedly true that the amendment allows–requires–that the consumer bureau seek input from the folks it’s supposed to regulate. But the bureau doesn’t have to pay attention if it thinks the input lacks merit. The law only says that “Where appropriate, the agency shall modify the proposed rule.” It doesn’t say the bureau is required to modify the proposed rule.

And in the few occasions when a special panel was convened to deal with OSHA and EPA issues, the officials did their work well within the 60-day limit the law requires, according to Rob Mandelbaum in the You’re the Boss blog.

So, on balance, it’s not a bad thing.

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