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[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 1615 Introduced in Senate (IS)]

112th CONGRESS
  1st Session
                                S. 1615

To require enhanced economic analysis and justification of regulations 
proposed by certain Federal banking, housing, securities, and commodity 
                  regulators, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           September 22, 2011

Mr. Shelby (for himself, Mr. Crapo, Mr. Corker, Mr. DeMint, Mr. Vitter, 
     Mr. Johanns, Mr. Toomey, Mr. Kirk, Mr. Moran, and Mr. Wicker) 
introduced the following bill; which was read twice and referred to the 
            Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL

 
To require enhanced economic analysis and justification of regulations 
proposed by certain Federal banking, housing, securities, and commodity 
                  regulators, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Financial Regulatory Responsibility 
Act of 2011''.

SEC. 2. DEFINITIONS.

    As used in this Act--
            (1) the term ``agency'' means the Board of Governors of the 
        Federal Reserve System, the Bureau of Consumer Financial 
        Protection, the Commodity Futures Trading Commission, the 
        Federal Deposit Insurance Corporation, the Federal Housing 
        Finance Agency, the Financial Stability Oversight Council, the 
        Office of the Comptroller of the Currency, the Office of 
        Financial Research, the National Credit Union Administration, 
        and the Securities and Exchange Commission;
            (2) the term ``chief economist'' means--
                    (A) with respect to the Board of Governors of the 
                Federal Reserve System, the Director of the Division of 
                Research and Statistics, or an employee of the agency 
                with comparable authority;
                    (B) with respect to the Bureau of Consumer 
                Financial Protection, the Assistant Director for 
                Research, or an employee of the agency with comparable 
                authority;
                    (C) with respect to the Commodity Futures Trading 
                Commission, the Chief Economist, or an employee of the 
                agency with comparable authority;
                    (D) with respect to the Federal Deposit Insurance 
                Corporation, the Director of the Division of Insurance 
                and Research, or an employee of the agency with 
                comparable authority;
                    (E) with respect to the Federal Housing Finance 
                Agency, the Chief Economist, or an employee of the 
                agency with comparable authority;
                    (F) with respect to the Financial Stability 
                Oversight Council, the Chief Economist, or an employee 
                of the agency with comparable authority;
                    (G) with respect to the Office of the Comptroller 
                of the Currency, the Director for Policy Analysis, or 
                an employee of the agency with comparable authority;
                    (H) with respect to the Office of Financial 
                Research, the Director, or an employee of the agency 
                with comparable authority;
                    (I) with respect to the National Credit Union 
                Administration, the Chief Economist, or an employee of 
                the agency with comparable authority; and
                    (J) with respect to the Securities and Exchange 
                Commission, the Director of the Division of Risk, 
                Strategy, and Financial Innovation, or an employee of 
                the agency with comparable authority;
            (3) the term ``Council'' means the Chief Economists Council 
        established under section 9; and
            (4) the term ``regulation''--
                    (A) means an agency statement of general 
                applicability and future effect that is designed to 
                implement, interpret, or prescribe law or policy or to 
                describe the procedure or practice requirements of an 
                agency, including rules, orders of general 
                applicability, interpretive releases, and other 
                statements of general applicability that the agency 
                intends to have the force and effect of law;
                    (B) does not include--
                            (i) a regulation issued in accordance with 
                        the formal rulemaking provisions of section 556 
                        or 557 of title 5, United States Code;
                            (ii) a regulation that is limited to agency 
                        organization, management, or personnel matters;
                            (iii) a regulation promulgated pursuant to 
                        statutory authority that expressly prohibits 
                        compliance with this provision;
                            (iv) a regulation that is certified by the 
                        agency to be an emergency action, if such 
                        certification is published in the Federal 
                        Register; or
                            (v) a regulation that is promulgated by the 
                        Board of Governors of the Federal Reserve 
                        System or the Federal Open Market Committee 
                        under section 10A, 10B, 13, 13A, or 19 of the 
                        Federal Reserve Act, or any of subsections (a) 
                        through (f) of section 14 of that Act.

SEC. 3. REQUIRED REGULATORY ANALYSIS.

    (a) Requirements for Notices of Proposed Rulemaking.--An agency may 
not issue a notice of proposed rulemaking unless the agency includes in 
the notice of proposed rulemaking an analysis that contains, at a 
minimum, with respect to each regulation that is being proposed--
            (1) an identification of the need for the regulation and 
        the regulatory objective, including identification of the 
        nature and significance of the market failure, regulatory 
        failure, or other problem that necessitates the regulation;
            (2) an explanation of why the private market or State, 
        local, or tribal authorities cannot adequately address the 
        identified market failure or other problem;
            (3) an analysis of the adverse impacts to regulated 
        entities, other market participants, economic activity, or 
        agency effectiveness that are engendered by the regulation and 
        the magnitude of such adverse impacts;
            (4) a quantitative and qualitative assessment of all 
        anticipated direct and indirect costs and benefits of the 
        regulation (as compared to a benchmark that assumes the absence 
        of the regulation), including--
                    (A) compliance costs;
                    (B) effects on economic activity, net job creation 
                (excluding jobs related to ensuring compliance with the 
                regulation), efficiency, competition, and capital 
                formation;
                    (C) regulatory administrative costs; and
                    (D) costs imposed by the regulation on State, 
                local, or tribal governments or other regulatory 
                authorities;
            (5) if quantified benefits do not outweigh quantitative 
        costs, a justification for the regulation;
            (6) identification and assessment of all available 
        alternatives to the regulation, including modification of an 
        existing regulation or statute, together with--
                    (A) an explanation of why the regulation meets the 
                objectives of the regulation more effectively than the 
                alternatives, and if the agency is proposing multiple 
                alternatives, an explanation of why a notice of 
                proposed rulemaking, rather than an advanced notice of 
                proposed rulemaking, is appropriate; and
                    (B) if the regulation is not a pilot program, an 
                explanation of why a pilot program is not appropriate;
            (7) if the regulation specifies the behavior or manner of 
        compliance, an explanation of why the agency did not instead 
        specify performance objectives;
            (8) an assessment of how the burden imposed by the 
        regulation will be distributed among market participants, 
        including whether consumers, investors, or small businesses 
        will be disproportionately burdened;
            (9) an assessment of the extent to which the regulation is 
        inconsistent, incompatible, or duplicative with the existing 
        regulations of the agency or those of other domestic and 
        international regulatory authorities with overlapping 
        jurisdiction;
            (10) a description of any studies, surveys, or other data 
        relied upon in preparing the analysis;
            (11) an assessment of the degree to which the key 
        assumptions underlying the analysis are subject to uncertainty; 
        and
            (12) an explanation of predicted changes in market 
        structure and infrastructure and in behavior by market 
        participants, including consumers and investors, assuming that 
        they will pursue their economic interests.
    (b) Requirements for Notices of Final Rulemaking.--
            (1) In general.--Notwithstanding any other provision of 
        law, an agency may not issue a notice of final rulemaking with 
        respect to a regulation unless the agency--
                    (A) has issued a notice of proposed rulemaking for 
                the relevant regulation;
                    (B) has conducted and includes in the notice of 
                final rulemaking an analysis that contains, at a 
                minimum, the elements required under subsection (a); 
                and
                    (C) includes in the notice of final rulemaking 
                regulatory impact metrics selected by the chief 
                economist to be used in preparing the report required 
                pursuant to section 6.
            (2) Consideration of comments.--The agency shall 
        incorporate in the elements described in paragraph (1)(B) the 
        data and analyses provided to the agency by commenters during 
        the comment period, or explain why the data or analyses are not 
        being incorporated.
            (3) Comment period.--An agency shall not publish a notice 
        of final rulemaking with respect to a regulation, unless the 
        agency--
                    (A) has allowed at least 90 days from the date of 
                publication in the Federal Register of the notice of 
                proposed rulemaking for the submission of public 
                comments; or
                    (B) includes in the notice of final rulemaking an 
                explanation of why the agency was not able to provide a 
                90-day comment period.
            (4) Prohibited rules.--
                    (A) In general.--An agency may not publish a notice 
                of final rulemaking if the agency, in its analysis 
                under paragraph (1)(B), determines that the quantified 
                costs are greater than the quantified benefits under 
                subsection (a)(5).
                    (B) Publication of analysis.--If the agency is 
                precluded by subparagraph (A) from publishing a notice 
                of final rulemaking, the agency shall publish in the 
                Federal Register and on the public website of the 
                agency its analysis under paragraph (1)(B), and provide 
                the analysis to each House of Congress.
                    (C) Congressional waiver.--If the agency is 
                precluded by subparagraph (A) from publishing a notice 
                of final rulemaking, Congress, by joint resolution 
                pursuant to the procedures set forth for joint 
                resolutions in section 802 of title 5, United States 
                Code, may direct the agency to publish a notice of 
                final rulemaking notwithstanding the prohibition 
                contained in subparagraph (A). In applying section 802 
                of title 5, United States Code, for purposes of this 
                paragraph, section 802(e)(2) shall not apply and the 
                term--
                            (i) ``joint resolution'' or ``joint 
                        resolution described in subsection (a)'' means 
                        only a joint resolution introduced during the 
                        period beginning on the submission or 
                        publication date and ending 60 days thereafter 
                        (excluding days either House of Congress is 
                        adjourned for more than 3 days during a session 
                        of Congress), the matter after the resolving 
                        clause of which is as follows: ``That Congress 
                        directs, notwithstanding the prohibition 
                        contained in (3)(b)(4)(A) of the Financial 
                        Regulatory Responsibility Act of 2011, the __ 
                        to publish the notice of final rulemaking for 
                        the regulation or regulations that were the 
                        subject of the analysis submitted by the __ to 
                        Congress on __.'' (The blank spaces being 
                        appropriately filled in.); and
                            (ii) ``submission or publication date'' 
                        means--
                                    (I) the date on which the analysis 
                                under paragraph (1)(B) is submitted to 
                                Congress under paragraph (4)(B); or
                                    (II) if the analysis is submitted 
                                to Congress less than 60 session days 
                                or 60 legislative days before the date 
                                on which the Congress adjourns a 
                                session of Congress, the date on which 
                                the same or succeeding Congress first 
                                convenes its next session.

SEC. 4. RULE OF CONSTRUCTION.

    For purposes of the Paperwork Reduction Act (44 U.S.C. 3501 et 
seq.), obtaining, causing to be obtained, or soliciting information for 
purposes of complying with section 3 with respect to a proposed 
rulemaking shall not be construed to be a collection of information, 
provided that the agency has first issued an advanced notice of 
proposed rulemaking in connection with the regulation, identifies that 
advanced notice of proposed rulemaking in its solicitation of 
information, and informs the person from whom the information is 
obtained or solicited that the provision of information is voluntary.

SEC. 5. PUBLIC AVAILABILITY OF DATA AND REGULATORY ANALYSIS.

    (a) In General.--At or before the commencement of the public 
comment period with respect to a regulation, the agency shall make 
available on its public website sufficient information about the data, 
methodologies, and assumptions underlying the analyses performed 
pursuant to section 3 so that the analytical results of the agency are 
capable of being substantially reproduced, subject to an acceptable 
degree of imprecision or error.
    (b) Confidentiality.--The agency shall comply with subsection (a) 
in a manner that preserves the confidentiality of nonpublic 
information, including confidential trade secrets, confidential 
commercial or financial information, and confidential information about 
positions, transactions, or business practices.

SEC. 6. FIVE-YEAR REGULATORY IMPACT ANALYSIS.

    (a) In General.--Not later than 5 years after the date of 
publication in the Federal Register of a notice of final rulemaking, 
the chief economist of the agency shall issue a report that examines 
the economic impact of the subject regulation, including the direct and 
indirect costs and benefits of the regulation.
    (b) Regulatory Impact Metrics.--In preparing the report required by 
subsection (a), the chief economist shall employ the regulatory impact 
metrics included in the notice of final rulemaking pursuant to section 
3(b)(1)(C).
    (c) Reproducibility.--The report shall include the data, 
methodologies, and assumptions underlying the evaluation so that the 
agency's analytical results are capable of being substantially 
reproduced, subject to an acceptable degree of imprecision or error.
    (d) Confidentiality.--The agency shall comply with subsection (c) 
in a manner that preserves the confidentiality of nonpublic 
information, including confidential trade secrets, confidential 
commercial or financial information, and confidential information about 
positions, transactions, or business practices.
    (e) Report.--The agency shall submit the report required by 
subsection (a) to the Committee on Banking, Housing, and Urban Affairs 
of the Senate and the Committee on Financial Services of the House of 
Representatives and post it on the public website of the agency. The 
Commodity Futures Trading Commission shall also submit its report to 
the Committee on Agriculture, Nutrition, and Forestry of the Senate and 
the Committee on Agriculture of the House of Representatives.

SEC. 7. RETROSPECTIVE REVIEW OF EXISTING RULES.

    (a) Regulatory Improvement Plan.--Not later than 1 year after the 
date of enactment of this Act and every 5 years thereafter, each agency 
shall develop, submit to the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Financial Services of the 
House of Representatives, and post on the public website of the agency 
a plan, consistent with law and its resources and regulatory 
priorities, under which the agency will modify, streamline, expand, or 
repeal existing regulations so as to make the regulatory program of the 
agency more effective or less burdensome in achieving the regulatory 
objectives. The Commodity Futures Trading Commission shall also submit 
its plan to the Committee on Agriculture, Nutrition, and Forestry of 
the Senate and the Committee on Agriculture of the House of 
Representatives.
    (b) Implementation Progress Report.--Two years after the date of 
submission of each plan required under subsection (a), each agency 
shall develop, submit to the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Financial Services of the 
House of Representatives, and post on the public website of the agency 
a report of the steps that it has taken to implement the plan, steps 
that remain to be taken to implement the plan, and, if any parts of the 
plan will not be implemented, reasons for not implementing those parts 
of the plan. The Commodity Futures Trading Commission shall also submit 
its plan to the Committee on Agriculture, Nutrition, and Forestry of 
the Senate and the Committee on Agriculture of the House of 
Representatives.

SEC. 8. JUDICIAL REVIEW.

    (a) In General.--Notwithstanding any other provision of law, during 
the period beginning on the date on which a notice of final rulemaking 
for a regulation is published in the Federal Register and ending 1 year 
later, a person that is adversely affected or aggrieved by the 
regulation is entitled to bring an action in the United States Court of 
Appeals for the District of Columbia Circuit for judicial review of 
agency compliance with the requirements of section 3.
    (b) Stay.--The court may stay the effective date of the regulation 
or any provision thereof.
    (c) Relief.--If the court finds that an agency has not complied 
with the requirements of section 3, the court shall vacate the subject 
regulation, unless the agency shows by clear and convincing evidence 
that vacating the regulation would result in irreparable harm. Nothing 
in this section affects other limitations on judicial review or the 
power or duty of the court to dismiss any action or deny relief on any 
other appropriate legal or equitable ground.

SEC. 9. CHIEF ECONOMISTS COUNCIL.

    (a) Establishment.--There is established the Chief Economists 
Council.
    (b) Membership.--The Council shall consist of the chief economist 
of each agency. The members of the Council shall select the first 
chairperson of the Council. Thereafter the position of Chairperson 
shall rotate annually among the members of the Council.
    (c) Meetings.--The Council shall meet at the call of the 
Chairperson, but not less frequently than quarterly.
    (d) Report.--One year after the effective date of this Act and 
annually thereafter, the Council shall prepare and submit to the 
Committee on Banking, Housing, and Urban Affairs and the Committee on 
Agriculture, Nutrition, and Forestry of the Senate and the Committee on 
Financial Services and the Committee on Agriculture of the House of 
Representatives a report on--
            (1) the benefits and costs of regulations adopted by the 
        agencies during the past 12 months;
            (2) the regulatory actions planned by the agencies for the 
        upcoming 12 months;
            (3) the cumulative effect of the existing regulations of 
        the agencies on economic activity, innovation, international 
        competitiveness of entities regulated by the agencies, and net 
        job creation (excluding jobs related to ensuring compliance 
        with the regulation);
            (4) the training and qualifications of the persons who 
        prepared the cost-benefit analyses of each agency during the 
        past 12 months;
            (5) the sufficiency of the resources available to the chief 
        economists during the past 12 months for the conduct of the 
        activities required by this Act; and
            (6) recommendations for legislative or regulatory action to 
        enhance the efficiency and effectiveness of financial 
        regulation in the United States.

SEC. 10. CONFORMING AMENDMENTS.

    Section 15(a) of the Commodity Exchange Act (7 U.S.C. 19(a)) is 
amended--
            (1) by striking paragraph (1);
            (2) in paragraph (2), by striking (2) and all that follows 
        through ``light of--'' and inserting the following:
            ``(1) Considerations.--Before promulgating a regulation 
        under this chapter or issuing an order (except as provided in 
        paragraph (2)), the Commission shall take into consideration--
        '';
            (3) in paragraph (1), as so redesignated--
                    (A) in subparagraph (B), by striking ``futures'' 
                and inserting ``the relevant'';
                    (B) in subparagraph (C), by adding ``and'' at the 
                end;
                    (C) in subparagraph (D), by striking ``and'' at the 
                end; and
                    (D) by striking subparagraph (E); and
            (4) by redesignating paragraph (3) as paragraph (2).

SEC. 11. OTHER REGULATORY ENTITIES.

    (a) Securities and Exchange Commission.--Not later than 1 year 
after the date of enactment of this Act, the Securities and Exchange 
Commission shall provide to the Committee on Banking, Housing, and 
Urban Affairs of the Senate and the Committee on Financial Services of 
the House of Representatives a report setting forth a plan for 
subjecting the Public Company Accounting Oversight Board, the Municipal 
Securities Rulemaking Board, and any national securities association 
registered under section 15A of the Securities Exchange Act of 1934 (15 
U.S.C. 78o-4(a)) to the requirements of this Act, other than direct 
representation on the Council.
    (b) Commodity Futures Trading Commission.--Not later than 1 year 
after the date of enactment of this Act, the Commodity Futures Trading 
Commission shall provide to the Committee on Banking, Housing, and 
Urban Affairs of the Senate, the Committee on Financial Services of the 
House of Representatives, the Committee on Agriculture, Nutrition, and 
Forestry of the Senate, and the Committee on Agriculture of the House 
of Representatives a report setting forth a plan for subjecting any 
futures association registered under section 17 of the Commodity 
Exchange Act (7 U.S.C. 21) to the requirements of this Act, other than 
direct representation on the Council.

SEC. 12. AVOIDANCE OF DUPLICATIVE OR UNNECESSARY ANALYSES.

    An agency may perform the analyses required by this Act in 
conjunction with, or as a part of, any other agenda or analysis 
required by any other provision of law, if such other analysis 
satisfies the provisions this Act.

SEC. 13. SEVERABILITY.

    If any provision of this Act or the application of any provision of 
this Act to any person or circumstance, is held invalid, the 
application of such provision to other persons or circumstances, and 
the remainder of this Act, shall not be affected thereby.
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