WASHINGTON — Top banking regulators are sounding the alarm over a bipartisan bill that would give the president authority to require more rigorous analyses of rules they propose.

The Independent Agency Regulatory Analysis Act was introduced in August by Sen. Robert Portman, R-Ohio, and co-sponsored by Sens. Mark Warner, D-Va., and Susan Collins, R-Maine.

The legislation would authorize the president to require all independent agencies to take up to 13 additional steps before proposing a rule, including measuring its costs and benefits. The bill could face a mark-up in the Homeland Security and Governmental Affairs Committee in the lame duck session following the Nov. 6 elections.

But in a letter obtained by American Banker, financial regulators warn that the bill would transform the role of independent agencies and undermine their authority.

"This would give any President unprecedented authority to influence the policy and rulemaking functions of independent regulatory agencies and would constitute a fundamental change in the role of independent regulatory agencies," says the Oct. 26 letter to panel chairman Joseph Lieberman, I-Ct., and ranking member Collins.

The letter was signed by Federal Reserve Board Chairman Ben Bernanke, Securities and Exchange Commission Chairman Mary Schapiro, Comptroller of the Currency Thomas Curry, Federal Deposit Insurance Corp. Acting Chairman Martin Gruenberg, Consumer Financial Protection Bureau Director Richard Cordray and National Credit Union Administration Chairman Debbie Matz.

"Beyond injecting an administration's influence directly into our rulemaking, the bill also would interfere with our ability to promulgate rules critical to our missions in a timely manner and would likely result in unnecessary and unwarranted litigation in connection with our rules," the letter says. "We urge you to consider the potential negative consequences of this bill before proceeding with it legislatively, and would be happy to discuss it in more detail at your convenience."

The Fed would get an exemption from the bill's requirements for its monetary duties, but observers said it's unclear how far that exclusion would extend.

The regulators' join several consumer groups that have also raised alarm bells about the bill, including the National Consumer Law Center and the Center for Responsible Lending.

"This bill would undercut the ability of independent federal agencies like the Consumer Financial Protection Bureau, the Consumer Product Safety Commission and the Federal Trade Commission to protect consumers from predatory financial schemes, dangerous consumer products and costly, anti-competitive practices," the groups wrote in a Sept. 13 letter.

"Most significantly for consumers, S. 3468 imposes duplicative and time-consuming requirements on independent agencies to conduct cost-benefit analyses of proposed protections."

But supporters of the bill argue that the new requirements will help standardize the rulemaking process across independent and executive agencies and put cost at the forefront of rulemaking efforts.

"Independent agencies exercise vast power over major sectors our economy — from telecom, to agriculture, to financial services — but they are exempt from commonsense requirements including cost-benefit analysis of major regulations to ensure they do more good than harm," Portman said in an Aug. 1 press release.

"This bill would close the loophole for independent agencies by authorizing the president to bring them within the same regulatory review framework that applies to other agencies. This is a bipartisan, consensus reform with broad support, and it will promote a more stable regulatory environment for economic growth and job creation."

Portman also argues that a similar recommendation came out of the January 2012 President's Jobs Council report. The first-term senator was previously director of the White House Office of Management and Budget during President George W. Bush's administration. His bill would give new authority to the Office of Information and Regulatory Affairs, which is located inside OMB.

Despite its bipartisan credentials, the bill's future is uncertain, especially given the concerns raised by regulators. That is likely to make the legislation a harder sell for Democrats.

House Republicans, who are generally supportive of measures that require regulators to take into account cost-benefit analysis, have not yet introduced their own bill.

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