WASHINGTON — Members of the Senate Banking Committee are warning regulators responsible for implementing the rules of the Dodd-Frank Act not to ignore the potential economic cost of the new law.
In a letter sent last week to Inspector Generals at the Federal Reserve Board, Treasury Department, Federal Deposit Insurance Corp., and two other agencies, lawmakers demanded that the IGs conduct thorough reviews of economic assessments submitted by each agency and prepare written reports of their findings. Specifically, the IGs must provide descriptions of internal policies and procedures the agencies use to "ensure rigor and consistency in the economic analysis," and assessments of the degree to which "relevant staff … understand and follow statutory and the agency's own requirements."
The letter — sent by 10 lawmakers on Wednesday including Richard Shelby, the lead Republican on the panel — was prompted after an April report by the IG's office for the Commodity Futures Trading Commission found that legal formalities in the rulemaking process had "trumped" economic analysis.
"We are concerned that these rulemaking issues documented by the CFTC Inspector General's Report are not unique to the CFTC and are impeding the agencies' ability to understand the economic effects of the proposed rules," they wrote. "Therefore, we request that you conduct a review of the economic analyses performed by the regulatory agency under your supervision and prepare a written report of your findings."
Lawmakers also raised concerns over "the cumulative burden of Dodd-Frank" and asked that agencies assess the impact the law would have on job creation and economic growth, as well as how consumers and business obtain credit, allocate capital and manage risk.
The Senators have asked the IGs to respond to their requests by June 13.
