This bill requires covered agencies to more thoroughly consider and justify the impact of their regulations on small businesses, including potential credit costs, and explain why the size and resources of these entities should not influence the rule if alternatives aren't adopted.
Scott Fitzgerald
Representative
WI-5
The "Making the CFPB Accountable to Small Businesses Act of 2025" requires covered agencies to consider the impact of proposed rules on small entities and provide detailed justifications if alternatives aren't adopted. It also requires agencies to describe steps taken to minimize credit costs for small entities.
CFPB Must Now Consider Small Biz Impacts Under New Bill, Justifying Rule Choices
The "Making the CFPB Accountable to Small Businesses Act of 2025" is changing the game for how the Consumer Financial Protection Bureau (CFPB) and other agencies create rules. Instead of just pushing through regulations, they now must explicitly consider how these rules will hit small businesses – and if they don't offer alternatives, they have to explain why in detail.
Small Biz Safeguards
This bill amends the Dodd-Frank Act and parts of Title 5 of the U.S. Code. The core change? Agencies, especially the CFPB, have to take a hard look at how new rules affect smaller operations. This isn't just a suggestion; it's a requirement. Section 3 of the bill specifically calls for a "detailed justification," backed by "factual, policy, and legal reasons," if an agency decides not to adopt alternatives that would be easier on small businesses. Think of it like this: if a new rule makes it way harder for a local bakery to get a loan, the agency has to explain exactly why that's necessary, and why the bakery's size shouldn't matter.
Credit Where It's Due
It's not just about paperwork. Section 4 dives into credit costs. The bill requires agencies to outline what they've done to keep credit affordable for small businesses. If a rule is going to make it more expensive for, say, a family-run construction company to finance new equipment, the agency needs to show they've tried to minimize that impact. And, like before, if they haven't minimized the impact, they need to provide a solid, detailed justification.
Real-World Rollout
Imagine a new rule requiring extensive (and expensive) cybersecurity upgrades. A big corporation might absorb that cost easily, but it could cripple a small tech startup. Under this bill, the agency would need to either offer a scaled-down version for smaller companies or explain, point-by-point, why that's not feasible. This could mean the difference between a startup thriving or folding under the weight of compliance costs.
The added requirements for detailed justifications could potentially slow down the rulemaking. Agencies might need more time to gather data and craft these explanations, which could delay both beneficial and potentially burdensome regulations. It's also possible that some agencies might find it easier to provide lengthy justifications rather than tailor rules to different business sizes, which could end up being a loophole in the system.