CONSUMER 

FINANCIAL 

PROTECTION 

BUREAU

Observations from 

Small Business 

Review Panels

Report to Congressional Requesters

August 2016

GAO-16-647

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-16-647, a report to 

congressional requesters.

August 2016

CONSUMER FINANCIAL PROTECTION 

BUREAU

Observations from Small Business Review 

Panels

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 notfor-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.

Figure: Overview of SBREFA Panel Process

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.

View GAO-16-647. For more information, 

contact William Shear at (202) 512-8678 or 

shearw@gao.gov.
Page i GAO-16-647 Consumer Financial Protection Bureau

Letter 1

Background 3

CFPB Met Requirements to Solicit, Consider, and Incorporate 

Small Business Inputs into Rulemakings 8

Small Entity Representatives Generally Viewed Panel Process as 

Useful, but Expressed Their Views on Areas for Improvement 16

Agency Comments 25

Appendix I Objectives, Scope, and Methodology 27

Appendix II Small Entity Representative Structured Interview Questions and Results 

for Closed-Ended Questions 30

Appendix III Comments from the Consumer Financial Protection Bureau 37

Appendix IV GAO Contact and Staff Acknowledgments 38

Tables

Table 1: CFPB’s Outreach Efforts to Help Prepare Small Entity 

Representatives for Meetings with SBREFA Panels 18

Table 2: Responses of Small Entity Representatives to Question 

6: “Did CFPB’s Outreach Efforts Prepare You to Provide 

Constructive Input during SBREFA Panel Meetings?” 19

Table 3: Responses of Small Entity Representatives to Question 

14: “Was Your Industry Represented among the Small 

Entity Representatives Who Participated in the Panel?” 21

Table 4: Numbers of Small Entity Representatives We 

Interviewed, Who Declined Our Interview Request, or 

Who We Were Unable to Interview during the Audit Time 

Frame, by Panel 28

Contents
Page ii GAO-16-647 Consumer Financial Protection Bureau

Figures

Figure 1 : Overall Rulemaking Steps and Process for Small 

Business Regulatory Enforcement Fairness Act Panels 4

Figure 2: Milestones Related to Input from Small Entity 

Representatives during Panel Process, 2012-2014 10

Figure 3: Responses of Small Entity Representatives to Question 

15: “Did the SBREFA panel provide time to collect your 

advice and recommendations on each of the following: 

(applicability, compliance, conflicting rules, alternatives, 

cost of credit, other topics)?” 23

Abbreviations

APA Administrative Procedures Act

CFPB Consumer Financial Protection Bureau

Dodd-Frank Act Dodd-Frank Wall Street Reform and Consumer 

Protection Act

HMDA Home Mortgage Disclosure Act

IRFA Initial Regulatory Flexibility Analysis

MLO Mortgage Loan Originator Compensation

MS Mortgage Servicing

OA Office of Advocacy

OIG Office of Inspector General

OIRA Office of Information and Regulatory Affairs

OMB Office of Management and Budget

RFA Regulatory Flexibility Act

SBA Small Business Administration

SBREFA Small Business Regulatory Enforcement Fairness 

Act

SER small entity representative

TILA-RESPA Truth In Lending Act and Real Estate Settlement 

Procedures Act

TRID TILA-RESPA Integrated Disclosure

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Page 1 GAO-16-647 Consumer Financial Protection Bureau

441 G St. N.W.

Washington, DC 20548

August 10, 2016

The Honorable David Vitter

Chairman

Committee on Small Business and Entrepreneurship

United States Senate

The Honorable James E. Risch

United States Senate

In certain cases, the Consumer Financial Protection Bureau (CFPB) is 

required to consider input from small businesses and other groups in its 

rulemaking process. Specifically, the Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Dodd-Frank Act) amended the Regulatory 

Flexibility Act (RFA) and required CFPB to convene Small Business 

Review Panels when proposed rules are expected to have a significant 

economic impact on a substantial number of small entities.1 CFPB 

conducts the Small Business Review Panels, also known as Small 

Business Regulatory Enforcement Fairness Act (SBREFA) panels, to 

seek direct input from small entities whose business would be impacted 

by CFPB rulemaking—which can include small businesses, small not-forprofit organizations, and small governmental jurisdictions—before the 

release of a notice of proposed rulemaking.2 One of the purposes of 

SBREFA is to give small businesses greater opportunity to participate 

and provide input into the development of regulations. Questions have 

been raised about the adequacy and thoroughness of CFPB’s analysis of 

 1

The Regulatory Flexibility Act (RFA) was enacted in 1980, Pub. L. No. 96-354, 94 Stat. 

1164 (1980), (codified as amended in 5 USC §§ 601-612). This act was amended by the 

Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996, Pub. L. No. 

104-121, 110 Stat. 857(1996), the Dodd-Frank Wall Street Reform and Consumer 

Protection Act, Pub. L. 111-203, 124 Stat. 1376 (2010), and the Small Business Jobs Act 

of 2010, Pub. L. No. 111-240, 125 Stat. 2504 (2010). The Small Business Regulatory 

Enforcement Fairness Act of 1996 established a requirement that the Environmental 

Protection Agency and the Occupational Safety and Health Administration convene 

SBREFA panels for those rules deemed to have a significant economic impact on a 

substantial number of small entities (see Pub. L. No. 104-121, § 244, 110 Stat. 857, 867 

(1996). Later, the Dodd-Frank Wall Street Reform and Consumer Protection Act placed 

the requirement for convening SBREFA panels on CFPB.

2

Small organizations encompass any not-for-profit enterprises that are independently 

owned and operated and not dominant in their field (such as private hospitals and 

educational institutions), 5 USC, § 601(4).

Letter
Page 2 GAO-16-647 Consumer Financial Protection Bureau

impacts on small entities during the rulemaking process, and its 

adherence to RFA.

You asked that we examine CFPB’s activities related to rulemaking 

efforts that involve small entities, including the activities related to 

conducting SBREFA panels to gather input from small entity 

representatives. This report addresses (1) the extent to which 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.

To assess the extent to which CFPB solicited, considered, and 

incorporated small entity inputs into rulemakings, we reviewed applicable 

laws, regulations, and guidance on CFPB’s rulemaking process. We 

compared the requirements with CFPB’s analyses on the impacts of four 

proposed rules on small entities. Specifically, we analyzed CFPB’s 

rulemaking processes and documents on all final rulemakings in which 

SBREFA panels were convened and final rules issued. As of April 2016, 

four CFPB rulemakings involving SBREFA panels had resulted in final 

rules. The rulemakings were focused on mortgage lending rules: Truth In 

Lending Act and Real Estate Settlement Procedures Act (TILA-RESPA) 

Integrated Disclosure, Mortgage Servicing (for TILA and RESPA), 

Mortgage Loan Originator Compensation, and the Home Mortgage 

Disclosure Act (HMDA).

To assess the views of small entity representatives in CFPB’s rulemaking 

processes, we contacted all representatives (69) who participated on the 

SBREFA panels associated with the four rulemakings. We conducted 

semi-structured interviews to seek the views and insights of 

representatives on CFPB’s outreach efforts and materials provided before 

the SBREFA panels, the discussions at the panel meetings themselves, 

CFPB’s consideration of representatives’ comments, and CFPB’s 

consideration of representatives’ inputs for the proposed and final rules.

We received responses from 57 of the 69 representatives (83 percent). 

For more information on our scope and methodology, see appendix I.

We conducted this performance audit from October 2015 through August 

2016 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.
Page 3 GAO-16-647 Consumer Financial Protection Bureau

The Dodd-Frank Act, which established CFPB, grants the agency 

authority to develop rules aimed at protecting consumers in the financial 

products and services marketplace.3 In particular, the Dodd-Frank Act 

requires that CFPB consider the

• potential benefits and costs to consumers and covered persons,

• impacts of proposed rules on small banks and credit unions, and

• impact of proposed rules on consumers in rural areas.

The act also requires CFPB to seek input from small entities during the 

rulemaking process for certain proposed rules. Specifically, when CFPB 

conducts a rulemaking that it determines will have a significant economic 

impact on a substantial number of small entities, CFPB must convene a 

SBREFA panel to seek direct input from small entities before issuing 

proposed rules for public comment, in addition to its normal rulemaking 

outreach to the public. This requirement extends beyond the typical 

rulemaking process, established under the Administrative Procedures 

Act, which encompasses the publication of most rules in the Federal 

Register and a period for public comment.4 The SBREFA panel 

requirement applies to CFPB, the Environmental Protection Agency, and 

the Occupational Safety and Health Administration.

Once convened, the SBREFA panel has 60 days to solicit input from 

small entities on a draft proposal of a rule and report this input as well as 

its findings in a panel report.5 The Regulatory Flexibility Act, as amended 

by the Dodd-Frank Act, requires CFPB to consider the input of small 

 3

CFPB is authorized to exercise its authorities under federal consumer financial law to 

administer, enforce, and otherwise implement the provisions of federal consumer financial 

law, Dodd-Frank Act, § 1022 (a). 

4

The Administrative Procedures Act (APA) (5 U.S.C. §§ 551-59, 701-06, 1305, 3105, 

3344, 5372, 7521) was passed in 1946 to clarify the process of making regulations, and 

allow greater accessibility and participation by the public in the rulemaking process. In 

general, APA requires the publication in the Federal Register of most rules, and a period 

for public comment. 

5

The SBREFA panel report is publicly released in conjunction with publication of the 

proposed rule in the Federal Register. 

Background

CFPB Rulemaking and the 

SBREFA Panel Process
Page 4 GAO-16-647 Consumer Financial Protection Bureau

entity representatives, which is reflected in the panel report, when drafting 

its proposed rule. See figure 1 for an overview of CFPB’s rulemaking 

process and the SBREFA panel process.6

Figure 1 : Overall Rulemaking Steps and Process for Small Business Regulatory Enforcement Fairness Act Panels

The SBREFA panels are chaired by CFPB and include other government 

agency representatives from the Small Business Administration’s (SBA) 

Office of Advocacy and the Office of Management and Budget’s (OMB) 

Office of Information and Regulatory Affairs. Once CFPB has made the 

determination to convene a SBREFA panel, it must identify the 

appropriate number and mix of small entity representatives for the 

purpose of obtaining advice and recommendations from the individuals 

about the potential impacts of the proposed rule. These representatives 

are to be selected from small businesses, not-for-profit organizations, and 

 6

Section 1100G of the Dodd-Frank Act amended some provisions of RFA, requiring CFPB 

to convene a SBREFA panel to seek direct input from small entities before issuing rules 

that the agency expects could have a significant economic impact on a substantial number 

of small entities.
Page 5 GAO-16-647 Consumer Financial Protection Bureau

government jurisdictions. Specifically, the Regulatory Flexibility Act, as 

amended by the Dodd-Frank Act, requires that CFPB identify these small 

entity representatives in consultation with the Chief Counsel for Advocacy 

of SBA.7 A small business must meet certain statutory definitions and 

SBA size standards to be eligible to participate in the SBREFA panel 

process.8

Before meeting with small entity representatives, CFPB, in collaboration 

with SBA’s Office of Advocacy and OMB’s Office of Information and 

Regulatory Affairs, develops an information package to share with small 

entity representatives. These materials typically contain information about 

the background and requirements for the proposed rule, an overview of 

the proposed rule (including a preliminary assessment of the potential 

impacts), and any alternatives under consideration, as presented by 

CFPB.9 CFPB also provides small entity representatives with an agenda 

and a list of potential discussion topics for the panel meeting, a fact sheet 

and other verbal and written information about their role in the process, 

and questions posed to small entity representatives on the impacts of the 

proposed rules for the meeting. CFPB officials also mentioned that they 

sometimes observed operations relevant to the rulemaking at a financial 

services organization.

When CFPB convenes a SBREFA panel, the panel must assess certain 

impacts of proposed rules before their release for public comment as a 

Notice of Proposed Rulemaking. Accordingly, topics of discussion for the 

panel meeting with small business representatives address subject areas 

that CFPB is required to assess in its rulemakings. In particular, CFPB 

must prepare an Initial Regulatory Flexibility Analysis with the following 

required elements:

 7

5 U.S.C § 609(b)(2), (4). 

8

Agencies must use the size standards contained in SBA’s regulations for small business 

size standards, 13 C.F.R. § 121.201, or follow the consultation procedures in 5 U.S.C. §

601(3) of RFA. See Small Business Administration, Office of Advocacy, A Guide for 

Government Agencies: How to Comply with the Regulatory Flexibility Act (Washington, 

D.C.: May 2012).

9

The materials provided to the SBREFA panel must include “any material the agency has 

prepared in connection with the RFA, including any draft proposed rule,” 5 U.S.C. § 

609(b)(4).

Initial and Final Regulatory 

Flexibility Analyses
Page 6 GAO-16-647 Consumer Financial Protection Bureau

• 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.10

Subsequent to the panel meeting with small entity representatives, the 

panel must prepare a report that summarizes the input of the small entity 

representatives and recommendations of the panel members. 

Accordingly, CFPB collaborates with SBA’s Office of Advocacy and 

OMB’s Office of Information and Regulatory Affairs to prepare the report, 

which is required to be completed within 60 days after the panel 

convenes. It is publicly released in conjunction with the release of the 

proposed rule as a Notice of Proposed Rulemaking in the Federal 

Register. Once the proposed rules are publicly released, another 

comment period is open to any interested parties, organizations, and the 

public in general.

After the comment process is complete for a proposed rule and CFPB 

has decided to finalize the rule and continues to find that the proposed 

rule will have a significant economic impact on a substantial number of 

small entities, CFPB then must prepare a Final Regulatory Flexibility 

 105 U.S.C. § 603 (b)-(d). The Initial Regulatory Flexibility Analysis must also include a 

description of the reasons why action by the agency is being considered and a succinct 

statement of the objectives of, and legal basis for, the proposed rule.
Page 7 GAO-16-647 Consumer Financial Protection Bureau

Analysis in conjunction with the final rule. This final analysis must include 

the following elements:

• description and estimate of the number of small entities to which the 

proposed rule will apply or an explanation of why no such estimate is 

available;

• description of the projected reporting, recordkeeping, and other 

compliance requirements of the proposed rule;

• description of the steps taken to minimize the significant economic 

impact on small entities consistent with the stated objectives of 

applicable statutes, including reasons for selecting the alternative 

adopted and rejecting other significant alternatives; and

• description of the steps taken to minimize any additional cost of credit 

for small entities.11

The Office of Inspector General (OIG) for the Board of Governors of the 

Federal Reserve System and the Consumer Financial Protection Bureau 

has reviewed certain aspects of CFPB’s rulemaking process, including 

the SBREFA panel process. In its September 2014 report, the OIG 

concluded that CFPB complied with Section 1100G of the Dodd-Frank 

Act in its operation of the SBREFA panels and rulemaking processes.12

The OIG also found that CFPB’s interim policies and procedures had 

been in use for approximately 2 years without being updated or finalized. 

The interim policies had afforded CFPB staff significant discretion in their 

rulemaking approach to regulatory analysis, which contributed to a 

variance in documentation and inconsistent knowledge transfer practices. 

At the time of the OIG review, CFPB used interim guidance to detail the 

 115 U.S.C. § 604 (a)(4)-(6). The Final Regulatory Flexibility Analysis must also include a 

description of the reasons why action by the agency is being considered, significant issues 

raised by public comments to the Initial Regulatory Flexibility Analysis and any changes to 

the proposed rule made as a result, and the response of the agency to any comments 

filed by the Chief Counsel for Advocacy of the Small Business Administration to the 

proposed rule.

12Office of Inspector General of the Board of Governors of the Federal Reserve System 

and the Consumer Financial Protection Bureau: The CFPB Complies With Section 1100G 

of the Dodd-Frank Act, But Opportunities Exist for the CFPB to Enhance Its Process, 

2014-SR-C-013, September 2014.

Inspector General Affirmed 

CFPB’s Compliance with 

Section 1100G of the 

Dodd-Frank Act
Page 8 GAO-16-647 Consumer Financial Protection Bureau

agency’s rulemaking process, which included utilizing the SBREFA 

process as required under the Dodd-Frank Act. CFPB used the interim 

guidance in the development and issuance of the four rules we reviewed, 

all of which were published in the Federal Register as proposed rules for 

public comment prior to September 2014.

The OIG made recommendations for CFPB to finalize its interim guidance 

documents and enhance data repository measures. CFPB finalized its 

internal guidance documents in 2014. As of March 2016, the OIG noted 

that CFPB had agreed with its recommendations. OIG staff also told us 

that corrective actions were underway and that the recommendations 

remained open as they awaited further documentation from CFPB to 

close out the recommendations, as of June 2016.

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. In addition, before the 

panel discussions CFPB worked with SBA’s Office of Advocacy to identify 

and select candidates to be small entity representatives. CFPB, SBA’s 

Office of Advocacy, and OMB’s Office of Information and Regulatory 

Affairs also worked collaboratively to develop and send materials to small 

entity representatives before panel meetings. The materials included 

information on the draft proposed rule (with a preliminary assessment of 

the potential impacts), discussion questions, and the SBREFA process.

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
Page 9 GAO-16-647 Consumer Financial Protection Bureau

Based on our analysis of testimonial and documentary evidence, we 

found evidence of collaboration between CFPB and SBA’s Office of 

Advocacy concerning the selection of small entity representatives. In 

doing so, we noted that different representatives appeared in each of the 

four panels. We also found that CFPB worked with trade associations to 

identify potential candidates for small entity representatives and further 

vetted organizations to help ensure that a variety of entity types were 

represented at the panel meeting, including those of varying sizes and 

from different geographic areas.

The time frames afforded to small entity representatives to provide input 

before panel meetings generally increased over time (see fig. 2). CFPB’s 

actions occurred within the context of a Regulatory Flexibility Act 

requirement, to complete panel reports 60 calendar days after the panels 

were convened. CFPB defines “convened” as the date on which CFPB, 

SBA’s Office of Advocacy, and OMB’s Office of Information and 

Regulatory Affairs formally established the panel, not the date on which 

the panel meeting with small entity representatives occurred.13 In earlier 

panels, CFPB either convened the panels shortly before providing 

representatives with materials or concurrently. Then, representatives had 

from 10 to 11 business days to review materials before panel meetings. 

For the most recently completed panel we reviewed (HMDA), CFPB first 

sent out materials and allowed 18 business days for representatives to 

provide input before the panel meeting. During this period, CFPB hosted 

teleconferences with representatives to help prepare them for the panel 

meeting. Then CFPB held the meeting 5 business days after convening 

the panel.

 13By way of contrast, EPA’s SBREFA panels are convened at the first formal meeting of 

the panel members. See EPA”s Action Development Process: Final Guidance for EPA 

Rulewriters: Regulatory Flexibility Act as amended by the Small Business Regulatory 

Enforcement Act, at 64 (2006). 

Time Frames to Solicit Inputs 

from Small Entity 

Representatives Varied
Page 10 GAO-16-647 Consumer Financial Protection Bureau

Figure 2: Milestones Related to Input from Small Entity Representatives during Panel Process, 2012-2014

Note: The timelines above illustrate CFPB’s outreach activities to small entity representatives in 

business days before and after the SBREFA panel was convened. The panel is required to issue a 

panel report 60 calendar days after the panel is convened.

CFPB officials said that their process has evolved to extend time spent on 

outreach to small entity representatives; specifically, they conducted more 

outreach with small entity representatives prior to convening the panel in 

connection with those regulations for which the Dodd-Frank Act did not 

mandate a specific issuance date (as with the HMDA panel). CFPB 

officials explained that the agency had less flexibility on the earlier panels 

because of the time frames required by the Dodd-Frank Act for the 

completion of the associated rules.

Similarly, the time allowed for small entity representatives to provide 

comments after the panel meetings (which were all-day meetings) varied. 

For instance, on the first panel to discuss the rule on the TILA-RESPA 

Integrated Disclosure, the panel provided an additional 5 business days 

for representatives to submit comments after the panel meeting. 

Therefore, representatives were given a total of 16 business days to 

review materials and provide input. For the HMDA rule, CFPB provided 

an additional 10 business days after the panel meeting for 

representatives to provide comments, giving representatives a total of 29 
Page 11 GAO-16-647 Consumer Financial Protection Bureau

business days to review materials, meet with the panel, and provide 

inputs to the rulemaking.

CFPB, SBA’s Office of Advocacy, and OMB’s Office of Information and 

Regulatory Affairs also collaborated to prepare panel reports as required. 

The panel reports we reviewed summarized the topics addressed during 

the panel discussions as well as the recommendations from the panels. 

These topics were consistent with the elements of the Initial Regulatory 

Flexibility Analysis that rulemakings under RFA, including those in the 

SBREFA process, must address. The panel reports also included written 

comments by small entity representatives within the appendices of the 

reports.

The agencies generally completed the reports within the deadline of 60 

days after the panel was convened.14 In preparing the panel reports, 

CFPB and SBA’s Office of Advocacy noted the challenges presented by 

the 60-day deadline. During this period, the panel sends materials to 

small entity representatives with time for review, conducts a formal 

meeting with the small entity representatives to gather their input, and 

provides time for the representatives to provide written comments before 

drafting the panel report. As previously discussed, CFPB considers a 

panel to be convened on the date it was established, not the date it met. 

Therefore, the later the panel meets with the small entity representatives, 

the more challenging it becomes to prepare the panel report within the 

deadline. After the panel report is prepared by the three agencies, CFPB 

makes it publicly available as part of its Notice of Proposed Rulemaking in 

the Federal Register. For the rulemakings we reviewed, the panel reports 

were publicly released approximately 2–4 months after the reports were 

completed and approximately 4–6 months after the panels were 

convened.15

 14One of the panel reports in our review, addressing the Mortgage Loan Originator 

Compensation rules, was finalized 2 days beyond the 60-day requirement. According to 

CFPB, this occurred because it determined that in order to allow additional opportunities 

for representatives to understand and comment on proposals under consideration, it 

would offer two additional conference calls, not required by statute, with small entity 

representatives. 

15Panel members (CFPB, SBA’s Office of Advocacy, and OMB’s Office of Information and 

Regulatory Affairs) collaboratively prepare the panel report, which is subsequently publicly 

released with the Notice of Proposed Rulemaking in the Federal Register.

CFPB Completed Required 

Reporting on Panels
Page 12 GAO-16-647 Consumer Financial Protection Bureau

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. 

Based on our review, CFPB’s Notices of Proposed Rulemaking that 

accompany the four proposed rules incorporated the required elements of 

an Initial Regulatory Flexibility Analysis. Similarly, the Notices of Final 

Rulemaking associated with these four rules addressed the required 

elements in the Final Regulatory Flexibility Analysis.

Each of the Notices of Proposed Rulemaking also included discussion of 

the required elements that apply to CFPB rulemakings generally, beyond 

the Regulatory Flexibility Act requirements. The elements are:

• the potential benefits and costs to consumers and covered persons;16

• impacts of proposed rules on depository institutions and credit unions 

with $10 billion or less in total assets;17 and

• impact of proposed rules on consumers in rural areas.18

Although CFPB addressed the general requirements, CFPB 

acknowledged that its assessments of impacts on consumers in rural 

areas in the proposed and final rules were sometimes not fully known 

because of limited information. In such cases, CFPB generally stated that 

it had limited information on such impacts and would continue seeking 

information and data on the impacts.19

 16This requirement includes consideration of the potential reduction of access by 

consumers to financial products or services, Dodd-Frank Act, § 1022 (b)(2)(A)(i) (codified 

at 12 U.S.C. § 5512(b)(2)(A)(i)).

17Dodd-Frank Act § 1022(b)(2)(A)(ii) (codified at 12 U.S.C. § 5512(b)(2)(A)(ii)) and § 1026 

(codified at 5 U.S.C. § 5516).

18Dodd-Frank Act, § 1022(b)(2)(a)(ii) (codified at 12 U.S.C. § 5512(b)(2)(A)(ii)).

19In January 2013, CFPB issued a rule that designated rural areas on a county-by-county 

basis using definitions developed by OMB. In 2015, CFPB expanded the definition of 

“rural” to include census blocks that the Bureau of the Census defines as being outside of 

urban areas, allowing additional areas to be considered rural. 

CFPB Addressed 

Required Elements of 

Initial and Final Regulatory 

Flexibility Analyses
Page 13 GAO-16-647 Consumer Financial Protection Bureau

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. In cases in which the documents 

included alternatives put forth by small entity representatives, the 

alternatives proposed by small entity representatives were typically 

focused on who should be exempt from a proposed rule or how much 

time should be allowed to implement it. The Regulatory Flexibility Act 

requires that each CFPB Initial Regulatory Flexibility Analysis include, 

among other things, 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 rules on small entities and any increase in the cost of credit for 

small entities.20 CFPB makes judgments about which alternatives meet 

this requirement. The following examples illustrate the CFPB focus in the 

rulemaking documents that we reviewed:

• Panel materials: As described earlier, panel materials include an 

overview of the proposed rule and any alternatives under 

consideration, as presented by CFPB. In the panel materials 

disseminated for each of the four rulemakings, CFPB presented its 

“Outline of Proposals under Consideration and Alternatives 

Considered.” Consistent with its internal guidance, CFPB developed 

the proposals and alternatives presented in these documents to 

facilitate inputs from small entity representatives. For example, in the 

panel materials for the TILA-RESPA Integrated Disclosure 

rulemaking, CFPB presented alternative prototypes for the “Loan 

Estimate” and “Settlement Disclosure” documents. According to 

CFPB, testing on these alternative prototypes with consumers was 

completed in January 2012, before the SBREFA panel met with 

representatives in March 2012.

• Panel reports: The panel reports generally comprehensively 

discussed different aspects of proposals and alternatives presented 

by CFPB. In reviewing the alternatives in the panel reports, we found 

that the discussions also principally addressed the proposed rules and 

alternatives presented by CFPB in the panel materials. Accordingly, 

the majority of comments from representatives in the panel reports 

 20See 5 U.S.C. § 603 (c); 5 U.S.C. § 603 (d)(1)(B). 

Information on Panels 

Focused on CFPB 

Proposals and Alternatives
Page 14 GAO-16-647 Consumer Financial Protection Bureau

were focused on their reactions to CFPB’s proposed rules and 

alternatives. Furthermore, some of the comments reflected 

discussions over which entities should be exempt from the proposed 

rules and time frames to implement them. For instance, on the HMDA 

rulemaking, representatives conveyed their positions on the 

appropriate threshold for exemption from certain reporting 

requirements. CFPB officials said that it was not often the case that 

small entity representatives offered a large volume of alternatives.

The SBREFA panel republishes the small entity representatives’

written comments in an appendix of the panel report. In some cases, 

panel reports include summaries of small entity representatives’ ideas 

for alternatives to CFPB’s proposed rules—that is, the discussion 

ranged beyond numeric exemption thresholds and implementation 

time frames. For example, in the report on Mortgage Loan Originator 

Compensation, small entity representatives asserted that the 

economic costs of origination vary with the loan balance, and 

therefore, a flat loan origination fee was unsuitable.

• Proposed rules: The Notices of Proposed Rulemaking contained 

discussion and assessment of CFPB’s proposed alternatives. 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. For example, for the proposed 

rule on Mortgage Loan Originator Compensation, CFPB discussed an 

alternative proposal from small entity representatives in the section of 

the proposed rule discussing significant alternatives.21 We also 

observed that CFPB often used the significant alternatives section of 

the Notice of Proposed Rulemaking to further elaborate on its own 

proposed rules. In an example of an alternative not presented in the 

significant alternatives section of the proposed rule, small entity 

representatives for the HMDA rulemaking sought an alternative for 

“CFPB to limit the addition of data points to those mandated by the 

Dodd-Frank Act and only as necessary to meet the HMDA purposes”

to address concerns about the burdens and costs associated with

new data points, particularly those not specifically enumerated in the 

 21This section of the proposed rule, which is titled “Description of Any Significant 

Alternatives to the Proposed Rule Which Accomplish the Stated Objectives of Applicable 

Statutes and Minimize Any Significant Economic Impact on the Proposed Rule on Small 

Entities,” is contained in the Initial Regulatory Flexibility Analysis.
Page 15 GAO-16-647 Consumer Financial Protection Bureau

Dodd-Frank Act.22 In its notice of proposed rulemaking, CFPB 

acknowledged concerns about the proposals to add new data points 

to the HMDA reporting requirements, but did not explicitly present the 

alternative offered by small entity representatives to limit the addition 

of new data points.23 During the comment period for this proposed 

rule, SBA’s Office of Advocacy commented on this alternative 

emphasizing that these data points were not statutorily required and 

urged CFPB to exempt small entities from collecting such data points 

until CFPB had the opportunity to determine whether the additional 

information furthered the goals of HMDA. As required by the RFA, 

CFPB responded to the comments of the Office of Advocacy, 

including its comment on discretionary data points, in its Final 

Regulatory Flexibility Analysis, which was published in the final HMDA 

rule.24 Other interested parties can identify or comment on 

alternatives as part of the proposed rule comment period.

CFPB officials emphasized that they solicited alternatives from small 

entity representatives, but were not required to list in the Notice of 

Proposed Rulemaking all alternatives offered by the small entity 

representatives. They only had to include those that they deemed 

significant and consistent with applicable statutes of the proposed rule.25

The officials also noted that data needed to make a fuller assessment of 

some alternatives from small entities were not always available. In 

developing the panel materials, CFPB officials stated that the agency 

sought to balance the need to develop enough information for 

consideration before the panel convened against providing such complete 

information that it would appear the agency had reached a conclusion on 

 22Final Report of the Small Business Review Panel on the CFPB’s Proposals Under 

Consideration for the Home Mortgage Disclosure Act (HMDA) Rulemaking, April 24, 2014, 

p. 21. The panel report, which summarizes the small entity representatives’ comments on 

the issue of additional data points (such as information about applicants and borrowers; 

loan features and pricing; unique identifiers for loans, properties, and loan originators; and 

other information that CFPB may deem appropriate) was publicly released in conjunction 

with the proposed rule (which references a CFPB website address to access the panel 

report).

2379 Fed. Reg. 51731, 51853 (Aug. 29, 2014). CFPB discussed concerns tied to specific 

data points in part V, “Section-by-Section Analysis”, of the Notice of Proposed 

Rulemaking. See 79 Fed. Reg. at 51761-51810.

2480 Fed. Reg. 66127, 66300 (Oct. 28, 2015).

25See 5 U.S.C. §603(c).
Page 16 GAO-16-647 Consumer Financial Protection Bureau

the content of the rule. As mentioned earlier, CFPB and SBA’s Office of 

Advocacy officials emphasized the challenge of completing the panel 

report within 60 days of convening the SBREFA panel. At the same time, 

CFPB officials stated that the public, including trade associations and 

small entities themselves, had opportunities to comment and provide 

additional information on the proposed rule after the SBREFA process 

was completed during the public comment period.

Small entity representatives’ views on the panel process were generally 

positive, but they also suggested areas for improvement. When asked 

their overall views on the SBREFA process (question 29 of structured 

interview, see app. II), 25 of 57 representatives we interviewed said the 

SBREFA process was good, 20 stated that they were glad to have served 

as small entity representatives, and 18 said the process was a good 

opportunity to be heard.26 For instance, 1 representative said her voice 

was heard and she would participate on another SBREFA panel if asked 

in the future. Another said the SBREFA panel was a learning process for 

CFPB and he would “jump at the opportunity” to be a part of it again.

Conversely, 13 of the 57 representatives stated that they felt CFPB 

treated the process as a formality. For example, 1 said CFPB was good 

at following processes but felt that it did not listen to input. He added that 

he felt CFPB’s mind was made up before the panel took place. Another 

felt the panel was more symbolic than meaningful—there was no 

reflection of input from small entity representatives in the rule and that 

representatives were not given a valid role in the rulemaking. 

Furthermore, 7 representatives felt the process was hindered by CFPB’s 

lack of knowledge of their industry. For example, one said CFPB staff did 

not have enough practical experience and during the panel meeting there 

was limited time to talk about the actual rule because small entity 

representatives had to explain certain banking processes to CFPB.

 26Because our question was open-ended, an interviewee could have commented on 

several issues and would have been counted more than once. Likewise, not all 

interviewees provided a response to every open-ended question. Thus in the responses 

for question 29, the tally of the categories of responses (63) added to more than the total 

number of representatives we interviewed (57) while at the same time all these coded 

responses came from only 38 interviewees. 

Small Entity 

Representatives 

Generally Viewed 

Panel Process as 

Useful, but Expressed 

Their Views on Areas 

for Improvement
Page 17 GAO-16-647 Consumer Financial Protection Bureau

Finally, 15 representatives felt the SBREFA process could be improved. 

For instance, one said she would have liked more detailed discussion 

with live beta or mock-up testing with her operational people so they 

could test some of the things CFPB proposed. She believes this would 

have produced a better rule. Another said there should have been a 

second panel meeting after publishing the proposed rule to discuss the 

topics again and so that representatives could better evaluate it. This 

representative further noted that with two panels, during the first panel 

CFPB could focus on closing its knowledge gaps in relation to how 

industries operate their businesses.

27

As discussed previously, CFPB conducted outreach efforts to prepare 

small entity representatives to provide constructive input during the panel 

meeting and the efforts varied by panel (see table 1). For all panels, 

CFPB provided the representatives with materials that included the draft 

proposal for rulemaking, discussion questions, and a fact sheet 

describing the SBREFA process. For the panels on the TILA-RESPA 

Integrated Disclosure and Mortgage Servicing rules, CFPB also provided 

representatives with a draft agenda for the panel meeting and the 

opportunity to comment. For the HMDA panel only, CFPB conducted two 

sets of teleconferences before the panel meeting to discuss elements of 

the draft proposal for rulemaking.

 27The formal panel process must be concluded within 60 days from the formal convening 

of the panel to the completion of its report. According to statute, the SBREFA process 

must be completed prior to the Notice of Proposed Rulemaking. 

Small Entity 

Representatives Generally 

Stated CFPB’s Outreach 

Efforts and Materials 

Helped Prepare Them for 

Panels
Page 18 GAO-16-647 Consumer Financial Protection Bureau

Table 1: CFPB’s Outreach Efforts to Help Prepare Small Entity Representatives for 

Meetings with SBREFA Panels

Rule

Provided panel 

materials

Solicited feedback 

on meeting 

agenda

Conducted 

teleconferences+

TRID ✔ ✔ ✘

MS ✔ ✔ ✘

MLO ✔ ✘ ✘

HMDA ✔ ✘ ✔

Source: CFPB. | GAO-16-647

Legend:

✔: Yes

✘: No

CFPB: Consumer Financial Protection Bureau

SBREFA: Small Business Regulatory Enforcement Fairness Act

TRID: Truth in Lending Act - Real Estate Settlement Procedures Act Integrated Disclosure

MS: Mortgage Servicing

MLO: Mortgage Loan Originator Compensation

HMDA: Home Mortgage Disclosure Act

+

These are teleconferences that address elements of CFPB’s draft proposal for rulemaking, and were 

held in addition to the teleconferences that introduce small entity representative to the SBREFA 

process.

Of the 57 small entity representatives we interviewed, 31 believed 

CFPB’s outreach efforts prepared them to provide constructive input 

during the SBREFA panel meeting (question 6) and 15 said CFPB efforts 

partially prepared them (see table 2). The HMDA panel had the greatest 

share of representatives who said CFPB’s outreach efforts prepared them 

to provide constructive input and the Mortgage Loan Originator 

Compensation panel had the smallest share. Seven representatives from 

the HMDA panel specifically mentioned the teleconferences were helpful 

when asked about CFPB’s outreach efforts.
Page 19 GAO-16-647 Consumer Financial Protection Bureau

Table 2: Responses of Small Entity Representatives to Question 6: “Did CFPB’s 

Outreach Efforts Prepare You to Provide Constructive Input during SBREFA Panel 

Meetings?”

Rule Yes No Partial Do not recall Total

TRID 8 3 4 1 16

MS 6 2 4 0 12

MLO 3 2 6 1 12

HMDA 14 2 1 0 17

Total 31 9 15 2 57

Source: GAO tabulation of responses to structured interviews. | GAO-16-647

Legend:

CFPB: Consumer Financial Protection Bureau

SBREFA: Small Business Regulatory Enforcement Fairness Act

TRID: Truth in Lending Act - Real Estate Settlement Procedures Act Integrated Disclosure

MS: Mortgage Servicing

MLO: Mortgage Loan Originator Compensation

HMDA: Home Mortgage Disclosure Act

Notes: We interviewed small entity representatives who participated on the SBREFA panels that 

CFPB convened during the TRID, Mortgage Servicing, Mortgage Loan Originator Compensation, and 

HMDA rulemakings. We interviewed 57 of 69 small entity representatives who participated in 

SBREFA panels for the four rulemakings.

Furthermore, when asked how were CFPB’s outreach efforts constructive 

or not constructive (question 7), 12 small entity representatives stated 

they needed more time to prepare for the panel. For example, responses 

from representatives included not enough time to prepare responses to 

the information CFPB requested; not enough time to reach out to other 

businesses and suppliers to gauge the proposal’s impacts; and not 

enough time to perform their day-to-day duties at their companies when 

preparing for the panel. CFPB officials stated that the role of small entity 

representatives does not include reaching out to other businesses or 

entities. As discussed previously, the time CFPB had available for 

outreach in the first three panels was constrained by the deadlines 

imposed by the Dodd-Frank Act to promulgate implementing regulations.

When asked how CFPB’s outreach could be improved (question 8), 10 of 

57 small entity representatives suggested CFPB obtain more knowledge 

of industry practices before convening the panels. For example, one 

representative believed CFPB was surprised by answers representatives 

provided to their questions because the agency lacked real world 

experience; the representative suggested CFPB do site visits with typical 
Page 20 GAO-16-647 Consumer Financial Protection Bureau

small entities to become better informed. Another representative said 

CFPB did not know what entities regulated its business or its reporting 

requirements, and that CFPB did not understand day-to-day operations in 

their line of business. CFPB officials stated they were diligent in their 

desire to understand business practices so they focused their attention on 

these areas during outreach. In addition, 7 of 57 said CFPB could provide 

better guidance about the role of small entity representatives in the 

process or what to expect at the panel meeting. For example, one 

representative believed some comments from small entity representatives 

at the panel meeting were not helpful because expectations were not set, 

including the type of input CFPB was seeking. As discussed previously, 

CFPB provides written and verbal guidance to representatives on what to

expect in the panel and their role in the SBREFA process.

As part of CFPB’s outreach efforts, they provided materials to the small 

entity representatives, including a draft proposal of the rule (with a 

preliminary assessment of the potential impacts), discussion questions for 

the panel meeting, and a fact sheet on the SBREFA process. Of the 57 

small entity representatives we interviewed, 44 stated the CFPB materials 

prepared them to provide constructive input at the panel meeting 

(question 11). Also, 33 stated CFPB provided these materials with time 

for sufficient review before the panel (question 10). Although most 

representatives responded favorably regarding the materials and the 

usefulness of the materials, 17 commented that the materials omitted 

some information or guidance that could have better prepared them to 

participate in the panel meeting (question 12). For example, one small 

entity representative suggested CFPB include examples of the types of 

impacts for which they were looking and another suggested CFPB include 

how it calculated cost increases.

Although 38 of 57 small entity representatives stated CFPB had selected 

participants who represented their respective industries (question 14), 

most small entity representatives on the Mortgage Loan Originator 

Compensation panel did not believe their industry was well represented

(see table 3 below). This sentiment was consistent across the industry 

representatives we interviewed. For this panel, the mortgage broker 

industry had the most representatives (7 of 17) of the five industries 

represented (the other four groups were commercial banks, credit unions, 

mortgage companies, and nonprofit housing organizations). However, 

several mortgage brokers believed their industry was not wellrepresented. For example, one mortgage broker said his industry should 

have had more representation because of the effects the rule has had on 

Representation of Industry 

on Panels Mostly Viewed 

Positively, with One 

Exception
Page 21 GAO-16-647 Consumer Financial Protection Bureau

mortgage brokers. In contrast, representatives from another industry said 

their industry was not well represented because so many mortgage 

brokers were on the panel. As discussed previously, CFPB works with 

SBA’s Office of Advocacy to determine the appropriate number of 

panelists to represent each industry.

Table 3: Responses of Small Entity Representatives to Question 14: “Was Your 

Industry Represented among the Small Entity Representatives Who Participated in 

the Panel?”

Rule Yes No Partial Do not recall Total

TRID 11 2 3 0 16

MS 10 1 0 1 12

MLO 3 7 2 0 12

HMDA 14 0 3 0 17

Total 38 10 8 1 57

Source: GAO tabulation of responses to structured interviews. | GAO-16-647

Legend:

TRID: Truth in Lending Act - Real Estate Settlement Procedures Act Integrated Disclosure

MS: Mortgage Servicing

MLO: Mortgage Loan Originator Compensation

HMDA: Home Mortgage Disclosure Act

Notes: We interviewed small entity representatives who participated on the Small Business 

Regulatory Enforcement Fairness Act (SBREFA) panels that the Consumer Financial Protection 

Bureau (CFPB) convened during the TRID, Mortgage Servicing, Mortgage Loan Originator 

Compensation, and HMDA rulemakings. We interviewed 57 of 69 small entity representatives who 

participated in SBREFA panels for the four rulemakings.

In our interviews, we asked the 57 small entity representatives if enough 

time had been provided during the meetings of the SBREFA panels to 

collect their advice and recommendations on the following topics 

(question 15):

a. Applicability. A description and estimate of the number of small 

entities to which the proposed rule will apply.

b. Compliance. A description of the projected reporting, 

recordkeeping and other compliance requirements of the 

proposed rule, including an estimate of the classes of small 

entities which will be subject to the requirement and the type of 

professional skills necessary for preparation of the report or 

record.

Some Small Entity 

Representatives Stated 

More Time Was Needed 

for Discussion during 

Panels
Page 22 GAO-16-647 Consumer Financial Protection Bureau

c. Conflicting rules. An identification of all relevant federal rules 

which may duplicate, overlap or conflict with the proposed rule.

d. Alternatives. Significant alternatives to the proposed rule that 

minimize any significant economic impact on small entities and 

that minimize increases in the cost of credit for small entities.

e. Cost of credit. Any projected increase in the cost of credit for 

small entities.

f. Other topics. Any additional topics related to the rulemaking.28

Representatives had varying recall about the specific topics of the panel 

discussions and their views about them (the panel meetings were held 2–

4 years before our interviews).29 Therefore, their responses should be 

viewed with caution. More representatives were able to recall discussions 

about compliance (question 15b) and alternatives (question 15d). Of the 

57 small entity representatives, 38 mentioned that there was not sufficient 

time for discussion for at least one of the six topics at panel meetings 

compared to 2 who said there was time to discuss all topics. Figure 3

illustrates the small entity representatives’ responses.

 28Section 609(b) of the RFA requires that the SBREFA panel collect advice and 

recommendations of each individual small entity representative, on issues related to 

elements of the initial regulatory flexibility analysis, including applicability, compliance, 

conflicting rules, and significant alternatives that minimize significant economic impact on 

small entities. 5 U.S.C. § 609(d)(4). Section 603(d) requires CFPB, for its initial regulatory 

flexibility analyses, to consult with small entities on projected increases in the cost of credit 

for small entities and significant alternatives that minimize the cost of credit for small 

entities. 5 USC § 603(d)(2)(B). CFPB typically collects the views of small entities about the 

cost of credit issues through the SBREFA panels. 

29The SBREFA panels for three rulemakings—TILA-RESPA Integrated Disclosure, 

Mortgage Servicing, and Mortgage Loan Originator Compensation—were held more than 

4 years ago and for HMDA, 2 years ago.
Page 23 GAO-16-647 Consumer Financial Protection Bureau

Figure 3: Responses of Small Entity Representatives to Question 15: “Did the 

SBREFA panel provide time to collect your advice and recommendations on each 

of the following: (applicability, compliance, conflicting rules, alternatives, cost of 

credit, other topics)?”

Notes: We interviewed small entity representatives who participated on the Small Business 

Regulatory Enforcement Flexibility Act (SBREFA) panels that the Consumer Financial Protection 

Bureau convened during Truth in Lending Act - Real Estate Settlement Procedures Act Integrated 

Disclosure, Mortgage Loan Originator Compensation, Mortgage Servicing, and Home Mortgage 

Disclosure Act rulemakings. We interviewed 57 of 69 small entity representatives who participated in 

SBREFA panels for the four rulemakings.

Furthermore, 19 stated that at least one topic important to their business 

or industry was not discussed during the panel meeting (question 16). For 

example, one representative noted that they did not discuss how the rule 

would impact costs for consumers. CFPB officials stated that at the end of 

each panel meeting representatives were given a final opportunity to 

bring up any issues they believed were not focused on or given enough 

attention. 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.
Page 24 GAO-16-647 Consumer Financial Protection Bureau

A majority of small entity representatives that we interviewed said that 

CFPB at least partially reported their views accurately (question 19) and 

appeared to at least partially take them into consideration during 

rulemaking (question 21).

• Of the 57 small entity representatives we interviewed, 25 stated their 

views were accurately characterized in the panel report. For instance, 

one said that she thought CFPB represented her views verbatim. 

Another stated she was glad to see her written comments included in 

the report. Twelve representatives stated the characterization of their 

views in the panel report was partially accurate. For instance, some 

representatives (5 of 12) said CFPB did not characterize some of their 

views with proper detail or tone.

• Six representatives stated their views were not accurately 

characterized in the panel report. For instance, one of the six said she 

felt CFPB wrote the report before the panel took place.

• Fourteen representatives did not remember seeing the panel report or 

did not recall how their views were characterized in it. As discussed 

previously, the representatives’ written comments were published in 

the appendixes of the panel reports.

Most of the 57 representatives felt CFPB at least partially considered their 

views, concerns, and suggestions in its rulemaking (question 21).

• Seventeen of 57 representatives believed CFPB considered their 

views, concerns, and suggestions. One of the 17 said he believed that 

CFPB considered his views but did not implement them in the 

rulemaking. Another said CFPB took all of the representatives’

concerns seriously, listened, and considered input where it had the 

latitude to do so, but he recognized CFPB had to include specific 

requirements in the Dodd-Frank Act.30

• Nineteen representatives stated CFPB partially considered their views 

in its rulemaking. One of the 19 said CFPB appeared to have heard 

the representatives and took some things into consideration, but he 

felt CFPB “was on a mission and knew how they wanted the rule to 

be.” Another believed CFPB tried to understand her concerns but the 

 30For example, the Dodd-Frank Act mandated CFPB to include in its HMDA rule several 

data fields in the reporting requirements.

A Majority of 

Representatives Said 

Their Views Were 

Characterized at Least 

Partially Accurately in the 

Panel Report and Were at 

Least Partially Considered 

in Rulemaking
Page 25 GAO-16-647 Consumer Financial Protection Bureau

final rule did not reconcile with the depths of her concerns; she noted 

some of this was due to requirements in the Dodd-Frank Act.

• Fifteen said CFPB did not appear to consider their views in its 

rulemaking. One representative said she felt defeated when she saw 

what came out after the panel; she thought CFPB was really listening 

but did not address any of the major areas of concern raised during 

the panel. Another thought CFPB officials already had their mind 

made up as to what should be in the rule. As discussed previously, 

CFPB uses the panel report to inform its proposed rule.

When asked if CFPB amended its proposed rule based on comments the 

representative made during the panel or in writing (question 23), 32 

believed the agency did. 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.

We provided a draft of this report to CFPB, SBA’s Office of Advocacy, 

and OMB for their review and comment. In its written comments 

(reproduced in app. III), CFPB generally agreed with our findings. CFPB,

SBA’s Office of Advocacy, and OMB’s Office of Information and 

Regulatory Affairs also provided technical comments, which we 

incorporated as appropriate.

Agency Comments
Page 26 GAO-16-647 Consumer Financial Protection Bureau

We are sending copies of this report to the appropriate congressional 

committees, CFPB, SBA’s Office of Advocacy, OMB, and other interested 

parties. In addition, the report will be available at no charge on the GAO 

website at http://www.gao.gov. 

If you or your staffs have any questions about this report, please contact 

me at (202) 512-8678 or ShearW@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff members who made key 

contributions to this report are listed in appendix IV.

William B. Shear

Director, Financial Markets and Community Investment
Appendix I: Objectives, Scope, and 

Methodology

Page 27 GAO-16-647 Consumer Financial Protection Bureau

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.

To assess the extent to which CFPB solicited, considered, and 

incorporated small business inputs into rulemakings, we interviewed and 

gathered information from CFPB, the Office of Advocacy at the Small 

Business Administration, and the Office of Information and Regulatory 

Affairs of the Office of Management and Budget about the process for 

Small Business Regulatory Enforcement Fairness Act (SBREFA) panels. 

We also contacted trade associations and industry participants to gain 

their perspectives on the SBREFA panel process. This work did not 

encompass any computer-generated data from agencies requiring a data 

reliability assessment. We also reviewed applicable laws, regulations, and 

guidance governing requirements for CFPB’s rulemaking process 

involving small business interests. We compared these requirements with 

CFPB’s analyses related to impacts of proposed rules on small 

businesses for four rulemakings. Specifically, we analyzed CFPB’s 

rulemaking processes and documents related to all rulemakings for which 

SBREFA panels were convened and final rules were issued.

As of April 2016, four CFPB rulemaking efforts involving SBREFA panels 

had resulted in final rules. These rulemakings were focused on mortgage 

lending and included rules associated with

• Truth-in-Lending Act and Real Estate Settlement Procedures Act 

(TILA-RESPA) Integrated Disclosure,

• Mortgage Servicing (for TILA and RESPA),

• Mortgage Loan Originator Compensation, and the

• Home Mortgage Disclosure Act.

To obtain the views of small entity representatives, we conducted semistructured interviews with small entity representatives who participated in 

the four panels to gain a general understanding of their insights on the 

SBREFA process. We developed a structured interview guide to inquire 

about seven stages of the process: (1) notification of rulemaking, (2) 

outreach to small entity representatives, (3) materials to review, (4) the 

panel meeting, (5) CFPB consideration of small entity representatives’

comments, (6) proposed rulemaking, and (7) final rule. We asked direct 

questions for each stage as well as open-ended questions about activities 

in the stages or for any additional comments.

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 28 GAO-16-647 Consumer Financial Protection Bureau

We contacted all 69 small entity representatives who participated in the 

four panels and completed interviews with 57 (an 83 percent response 

rate). Of those for whom we did not conduct interviews, 6 declined our 

interview request and 6 were unavailable for an interview during our audit 

time frame. Table 4 below shows how many small entity representatives 

we interviewed by panel. A copy of the structured interview questions and 

results of the close-ended questions are included in appendix II. This 

work did not encompass any computer-generated data requiring a data 

reliability assessment.

Table 4: Numbers of Small Entity Representatives We Interviewed, Who Declined 

Our Interview Request, or Who We Were Unable to Interview during the Audit Time 

Frame, by Panel

Rule Interviewed

Declined our 

interview request

Unable to interview

during audit time frame Total

TRID 16 0 0 16

MS 12 2 2 16

MLO 12 2 3 17

HMDA 17 2 1 20

Total 57 6 6 69

Source: GAO. | GAO-16-647

Legend:

TRID: Truth in Lending Act - Real Estate Settlement Procedures Act Integrated Disclosure

MS: Mortgage Servicing

MLO: Mortgage Loan Originator Compensation

HMDA: Home Mortgage Disclosure Act

Notes: We interviewed small entity representatives who participated on the Small Business 

Regulatory Enforcement Fairness Act (SBREFA) panels that the Consumer Financial Protection 

Bureau (CFPB) convened during the TRID, Mortgage Servicing, Mortgage Loan Originator 

Compensation, and HMDA rulemakings.

We conducted the interviews by telephone from February 10, 2016, to 

March 28, 2016. Each interview was conducted by a team of at least two 

analysts. To verify the information collected during the interviews, we 

reviewed the narrative and close-ended responses for consistency and 

reached consensus among analysts who conducted the interviews on the 

content of the interview data. The structured interviews contained a 

mixture of close-ended and open-ended questions. For most questions, 

including close-ended questions, the small entity representatives 

responded with a narrative answer. Based on insights from conducting 

the interviews and the relative importance of each question, we assigned 
Appendix I: Objectives, Scope, and 

Methodology

Page 29 GAO-16-647 Consumer Financial Protection Bureau

each question into one of three categories of content analysis: (1) none,

(2) Tier 1, or (3) Tier 2.

• None. Questions we assigned no content analysis were lower-priority 

questions, from which we deemed little information of value would be 

gleaned from conducting content analysis.

• Tier 1. For this analysis, two analysts independently reviewed all the 

small entity representatives’ responses to the question, developed 

their own categories of responses, and coded the responses to those 

categories. Then the analysts reconciled differences in their 

categories and coding to reach consensus. Questions we assigned 

Tier 1 analysis were the highest-priority questions (we deemed that 

information of high value would be gleaned from conducting content 

analysis).

• Tier 2. For this analysis, one analyst reviewed all the small entity 

representatives’ responses to the question, developed categories of 

responses, and coded the responses to those categories. Then 

another analyst reviewed the categories and coding for logic and 

errors. Questions we assigned to the Tier 2 analysis were priority 

questions (we deemed that information of value would be gleaned 

from conducting content analysis).

We conducted this performance audit from October 2015 through August 

2016 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.
Appendix II: Small Entity Representative 

Structured Interview Questions and Results for 

Closed-Ended Questions

Page 30 GAO-16-647 Consumer Financial Protection Bureau

We provided the following interview questions and preambles to the small 

entity representatives prior to our interviews. At the start of each 

interview, we reminded the representatives that the interview was 

intended to collect their opinions on the SBREFA process. We also 

recognized that the panels had taken place several years earlier and 

encouraged the representatives to answer to the best of their ability.

CFPB Notification of Rulemaking

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.

1. When did you first hear CFPB was considering rulemaking on [Rule]?

2. CFPB uses several techniques to notify small entities of its 

rulemaking. Which of the following techniques notified you of this 

particular rulemaking?

Press release 5

Notice on CFPB website 4

Notice in trade publications 15

Direct notification (such as a phone call or email) 12

Open conferences or public hearings 3

Soliciting comments online 1

Any other techniques 32

CFPB Outreach to Small Entity Representatives

The SBREFA panel is responsible for collecting advice and 

recommendations from each small entity representative on issues related 

to CFPB’s proposed rule. However, the quality of advice and 

recommendations depends on how prepared small entity representatives 

are to participate in the panel process. CFPB’s timing and method of 

outreach to you and the other small entity representatives prior to your 

meeting with the SBREFA panel is intended to foster a more thoughtful 

rulemaking process.

3. When were you first asked to participate on the CFPB SBREFA 

panel?

Appendix II: Small Entity Representative 

Structured Interview Questions and Results 

for Closed-Ended Questions
Appendix II: Small Entity Representative 

Structured Interview Questions and Results for 

Closed-Ended Questions

Page 31 GAO-16-647 Consumer Financial Protection Bureau

4. How were you asked to participate?

5. What outreach did CFPB make to you prior to its SBREFA panel?

6. Did CFPB’s outreach efforts prepare you to provide constructive input 

during the SBREFA panel meeting?

Yes 31

No 9

Partially 15

Do Not Know 2

7. How were CFPB’s outreach efforts constructive, or not constructive?

8. Do you have suggestions on how CFPB’s outreach could be 

improved?

Yes 39

No 18

SBREFA Panel Materials

Prior to your meeting with the SBREFA panel, CFPB provided you with 

(1) the draft proposal, (2) discussion questions, and (3) a fact sheet on 

the SBREFA process.

9. Did CFPB provide any additional materials prior to your meeting with 

the SBREFA panel other than the three listed above?

Yes 14

No 37

Do Not Know 6

10. From your perspective, did CFPB provide the materials with time for 

sufficient review prior to the SBREFA panel meeting?

Yes 33

No 15

Partially 6

Do Not Know 3
Appendix II: Small Entity Representative 

Structured Interview Questions and Results for 

Closed-Ended Questions

Page 32 GAO-16-647 Consumer Financial Protection Bureau

11. Did the materials provided by CFPB prepare you to provide 

constructive input during the panel?

Yes 44

No 2

Partially 9

Do Not Know 2

12. Was anything not included in the materials that could have better 

prepared you to participate in the panel?

Yes 17

No 37

Do Not Know 3

13. Do you have any other comments about the meeting materials?

SBREFA Panel Meeting

The SBREFA panel convened a meeting in the Washington, D.C. area 

with you and the other small entity representatives to collect your advice 

and recommendations on CFPB’s proposed rule. The following questions 

relate to your participation on and observation of that meeting.

14. Was your industry represented among the small entity representatives 

who participated in the panel?

Yes 38

No 10

Partially 8

Do Not Know 1

15. Did the SBREFA panel provide time to collect your advice and 

recommendations on each of the following:

a. A description and estimate of the number of small entities to 

which the proposed rule will apply.

Yes 27

No 12

Partially 3
Appendix II: Small Entity Representative 

Structured Interview Questions and Results for 

Closed-Ended Questions

Page 33 GAO-16-647 Consumer Financial Protection Bureau

Do Not Know 15

b. A description of the projected reporting, recordkeeping and other 

compliance requirements of the proposed rule, including an 

estimate of the classes of small entities which will be subject to 

the requirement and the type of professional skills necessary for 

preparation of the report or record.

Yes 33

No 12

Partially 7

Do Not Know 5

c. An identification of all relevant federal rules which may duplicate, 

overlap or conflict with the proposed rule.

Yes 19

No 14

Partially 10

Do Not Know 14

d. Significant alternatives to the proposed rule which minimize any 

significant economic impact on small entities.

Yes 18

No 24

Partially 9

Do Not Know 6

e. Any projected increase in the cost of credit for small entities.

Yes 27

No 11

Partially 9

Do Not Know 10
Appendix II: Small Entity Representative 

Structured Interview Questions and Results for 

Closed-Ended Questions

Page 34 GAO-16-647 Consumer Financial Protection Bureau

f. Any additional topics related to the rulemaking.

Yes 20

No 20

Partially 7

Do Not Know 10

16. Was there a topic or topics that are important to your business or 

industry that was not discussed during the panel?

Yes 19

No 31

Partial 5

Do Not Know 2

17. Do you have suggestions on how CFPB’s conduct of this panel could 

have been improved?

Yes 43

No 14

18. Do you have any other comments about the panel meeting?

CFPB’s Consideration of Your Comments

The SBREFA panel is required to summarize the comments voiced by 

small entity representatives in its panel report. Additionally, small entity 

representatives may submit written comments to the SBREFA panel to be 

included in the report. CFPB must consider the SBREFA panel report as 

it develops its proposed rulemaking.

19. Were your views, concerns, and suggestions accurately characterized 

by CFPB in the SBREFA panel report?

Yes 25

No 6

Partially 12

Do Not Know 14
Appendix II: Small Entity Representative 

Structured Interview Questions and Results for 

Closed-Ended Questions

Page 35 GAO-16-647 Consumer Financial Protection Bureau

20. Did you submit written comments to the SBREFA panel?

Yes 37

No 13

Do Not Know 7

21. Did CFPB consider your voiced and written views, concerns, and 

suggestions in its rulemaking?

Yes 17

No 15

Partially 19

Do Not Know 6

22. Do you have any other comments about how the panel considered 

your comments?

CFPB’s Proposed Rulemaking

When CFPB published its proposed rulemaking in the Federal Register, 

which included the SBREFA panel report, it initiated a public notice and 

comment period where small entities could submit comments based on 

the proposed rule.

23. Did CFPB amend its proposed rule based on comments you made 

during the panel or in writing?

Yes 32

No 22

Do Not Know 3

24. Were you satisfied with the proposed rule CFPB published in the 

Federal Register?

Yes 8

No 26

Partially 21

Do Not Know 2
Appendix II: Small Entity Representative 

Structured Interview Questions and Results for 

Closed-Ended Questions

Page 36 GAO-16-647 Consumer Financial Protection Bureau

25. Did you submit written comments on the proposed rule during the 

notice and comment period?

Yes 29

No 24

Do Not Know 4

CFPB’s Final Rule

After CFPB considers the comments submitted during the notice and 

comment period, it can publish a final rule to the Federal Register.

26. Did CFPB amend its final rule based on comments you made during 

the proposed rule’s notice and comment period?

Yes 18

No 28

Do Not Know 11

27. Were you satisfied with the final rule?

Yes 7

No 26

Partially 23

Do Not Know 1

28. Has CFPB’s 

Yes 20

No 27

Partially 8

Do Not Know 2

Closing

29. In view of the questions we have asked and your responses is there 

anything else you would like us to know about the SBREFA process 

for this CFPB panel or any comment you have about serving as a 

small entity representative?
Appendix III: Comments from the Consumer 

Financial Protection Bureau

Page 37 GAO-16-647 Consumer Financial Protection Bureau

Appendix III: Comments from the Consumer 

Financial Protection Bureau
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 38 GAO-16-647 Consumer Financial Protection Bureau

William B. Shear, (202) 512-8678, shearw@gao.gov

In addition to the contact named above, Debra Johnson (Assistant 

Director), Andrew Pauline (Assistant Director), Barry Kirby (Analyst in 

Charge), Timothy Bober, Alyssia Borsella, Emily Chalmers, William

Chatlos, Tiffani Humble, Davis Judson, Anne Kruse, John McGrail, Marc 

Molino, Alexandra Martin-Arseneau, Barbara Roesmann, and Elizabeth 

Wood made key contributions to this report.

Appendix IV: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(100356)
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