Sec. 8. Economic analysis of regulations of the Board of Governors of the Federal Reserve System
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Section 11 of the Federal Reserve Act ( 12 U.S.C. 248 ) is amended by inserting after subsection
(l)the following new subsection: Before issuing any regulation, the Board of Governors of the Federal Reserve System shall— clearly identify the nature and source of the problem that the proposed regulation is designed to address and assess the significance of that problem; assess whether any new regulation is warranted or, with respect to a proposed regulation that the Board of Governors is required to issue by statute and with respect to which the Board has the authority to exempt certain persons from the application of such regulation, compare— the costs and benefits of the proposed regulation; and the costs and benefits of a regulation under which the Board exempts all persons from the application of the proposed regulation, to the extent the Board is able; assess the qualitative and quantitative costs and benefits of the proposed regulation and propose or adopt a regulation only on a reasoned determination that the benefits of the proposed regulation outweigh the costs of the regulation; identify and assess available alternatives to the proposed regulation that were considered, including any alternative offered by a member of the Board of Governors of the Federal Reserve System or the Federal Open Market Committee and including any modification of an existing regulation, together with an explanation of why the regulation meets the regulatory objectives more effectively than the alternatives; and ensure that any proposed regulation is accessible, consistent, written in plain language, and easy to understand and shall measure, and seek to improve, the actual results of regulatory requirements. In deciding whether and how to regulate, the Board shall assess the costs and benefits of available regulatory alternatives, including the alternative of not regulating, and choose the approach that maximizes net benefits. Specifically, the Board shall— evaluate whether, consistent with achieving regulatory objectives, the regulation is tailored to impose the least impact on the availability of credit and economic growth and to impose the least burden on society, including market participants, individuals, businesses of different sizes, and other entities (including State and local governmental entities), taking into account, to the extent practicable, the cumulative costs of regulations; evaluate whether the regulation is inconsistent, incompatible, or duplicative of other Federal regulations; and with respect to a proposed regulation that the Board is required to issue by statute and with respect to which the Board has the authority to exempt certain persons from the application of such regulation, compare— the costs and benefits of the proposed regulation; and the costs and benefits of a regulation under which the Board exempts all persons from the application of the proposed regulation, to the extent the Board is able. In addition, in making a reasoned determination of the costs and benefits of a proposed regulation, the Board shall, to the extent that each is relevant to the particular proposed regulation, take into consideration the impact of the regulation, including secondary costs such as an increase in the cost or a reduction in the availability of credit or investment services or products, on— the safety and soundness of the United States banking system; market liquidity in securities markets; small businesses; community banks; economic growth; cost and access to capital; market stability; global competitiveness; job creation; the effectiveness of the monetary policy transmission mechanism; and employment levels. The Board shall explain in its final rule the nature of comments that it received and shall provide a response to those comments in its final rule, including an explanation of any changes that were made in response to those comments and the reasons that the Board did not incorporate concerns related to the potential costs or benefits in the final rule. Whenever the Board adopts or amends a regulation designated as a major rule within the meaning of section 804(2) of title 5, United States Code, it shall state, in its adopting release, the following: The purposes and intended consequences of the regulation. The assessment plan that will be used, consistent with the requirements of subparagraph (B), to assess whether the regulation has achieved the stated purposes. Appropriate postimplementation quantitative and qualitative metrics to measure the economic impact of the regulation and the extent to which the regulation has accomplished the stated purpose of the regulation. Any reasonably foreseeable indirect effects that may result from the regulation. The assessment plan required under this paragraph shall consider the costs, benefits, and intended and unintended consequences of the regulation. The plan shall specify the data to be collected, the methods for collection and analysis of the data, and a date for completion of the assessment. The assessment plan shall include an analysis of any jobs added or lost as a result of the regulation, differentiating between public and private sector jobs. The Board shall, not later than 2 years after the publication of the adopting release, publish the assessment plan in the Federal Register for notice and comment. If the Board determines, at least 90 days before the deadline for publication of the assessment plan, that an extension is necessary, the Board shall publish a notice of such extension and the specific reasons why the extension is necessary in the Federal Register. Any material modification of the assessment plan, as necessary to assess unforeseen aspects or consequences of the regulation, shall be promptly published in the Federal Register for notice and comment. If the Board has published the assessment plan for notice and comment at least 30 days before the adoption of a regulation designated as a major rule, the collection of data under the assessment plan shall not be subject to the notice and comment requirements in section 3506(c) of title 44, United States Code (commonly referred to as the Paperwork Reduction Act). Any material modification of the plan that requires collection of data not previously published for notice and comment shall also be exempt from such requirements if the Board has published notice in the Federal Register for comment on the additional data to be collected, at least 30 days before the initiation of data collection. Not later than 180 days after publication of the assessment plan in the Federal Register, the Board shall issue for notice and comment a proposal to amend or rescind the regulation, or shall publish a notice that the Board has determined that no action will be taken on the regulation. Such a notice will be deemed a final agency action. Solely as used in this subsection, the term regulation — means a 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 the Board of Governors, including rules, orders of general applicability, interpretive releases, and other statements of general applicability that the Board of Governors intends to have the force and effect of law; and does not include— a regulation issued in accordance with the formal rulemaking provisions of section 556 or 557 of title 5, United States Code; a regulation that is limited to the organization, management, or personnel matters of the Board of Governors; a regulation promulgated pursuant to statutory authority that expressly prohibits compliance with this provision; or a regulation that is certified by the Board of Governors to be an emergency action, if such certification is published in the Federal Register. . Nothing in this section shall apply to the requirements regarding the conduct of monetary policy described in section 2.
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Sec. 8
Economic analysis of regulations of the Board of Governors of the Federal Reserve System
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