Independent Research Could Improve the CFPB Rulemaking Process

by Ballard Spahr LLP
Contact

Recently, the Research Integrity Council (RIC) held its first Research Academic Forum, a panel discussion that focused on how independent academic research can help inform the agency rulemaking process, especially at the CFPB. As previously reported, the RIC’s objective is to ensure that good, quality research forms the basis for the rulemaking process. RIC Executive Director Irving Daniels introduced the topics and panelists: Thomas Durkin, retired Senior Economist in the Federal Reserve Board’s Division of Research and Statistics; Howard Beales, Professor at George Washington University School of Business and former Director of the Federal Trade Commission (FTC) Bureau of Consumer Protection; and Todd Zywicki, Professor of Law at George Mason University School of Law, Senior Scholar of the Mercatus Center, and former Director of the FTC Office of Policy Planning.

Each panelist spoke about how robust data collection and strong research can inform the rulemaking process. They described how providing agency staff with collected data and relevant research can help predict trends, provide insight on policy questions raised by agency staff, and potentially change the course of a proposed rule.

Mr. Durkin began the discussion with his insights on the research that has been made available by the CFPB so far. He expressed concerns with the overall lack of transparency in how the CFPB conducts its research, including the failure to identify the researchers involved and the authors of research reports. Mr. Durkin observed that there may not be sufficient collaboration taking place between the CFPB’s researchers and legal department, as at least one CFPB research questionnaire demonstrated an inherent failure in understanding of how the relevant law applied while another questionnaire captured the legal nuances, but was deficient in how the questions were structured, leading to faulty research. He also stressed that the CFPB should be reaching out to industry, as needed, to obtain relevant data.

Professor Beales focused on the importance of independence and disinterested analysis in producing high-quality research. He cautioned that without these defining characteristics, research can become malleable and used to pursue a specific agenda. Professor Beales commented that without the availability of strong research, an agency may instead rely on policy presumptions when issuing rules, and with no data or research to refute these underlying assumptions, courts are likely to defer to the agency’s position. By way of example, he discussed the flawed methodology widely observed in the survey that was the basis for the CFPB’s payday loan report. Professor Beales suggested that had the CFPB research been conducted using strong scientific methods, the results contained in the CFPB report may have very different. Professor Beales emphasized that to the extent an agency is not producing strong research internally, stakeholders should take advantage of opportunities to provide an agency with relevant data and research from external sources.

Professor Zywicki focused on how and why good research improves rulemaking; including how independent research differs from lobbying. He stressed that, “bad research beats no research.” If the only research available to an agency is flawed, whether produced internally or from an external source, then an agency will develop its rules based on the flawed research if there is no better research to refute the policy conclusions drawn from the flawed research. Professor Zywicki urged interested stakeholders to be proactive and forward looking in any approach toward research. He noted that because research takes time, and can be costly, it requires a long-term commitment from those individuals and organizations, including trade associations, that are interested in developing research. In his view, this research should be conducted long before a proposed rule is issued by an agency. Professor Zywicki also recommended that any such external research be conducted by academics to provide independent analysis of the raw data that can be collected by industries. He emphasized that researchers should be given the freedom to conduct this research for the purpose of educating both the industry and any relevant agencies, rather than as a tool to lobby for a specific agenda. Professor Zywicki stated, however, that strong, independent research can influence policy and prove to be a valuable resource during the rulemaking process.

During a question and answer session following the panel discussion, the panelists discussed how the RIC, and similar entities, could act as intermediaries between members of industry, academics, and agencies, such that each group could be kept up to date on the work of the others in order to maximize good research and help each group stay current, proactive, and forward looking. The panelists agreed that since research requires such a long lead time, agencies should better communicate in what policy areas future rules are being contemplated, so that high-quality research can be made available to improve the rulemaking process.

The RIC plans to hold its next meeting later this year, which will feature a panel discussion with internal agency research personnel.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ballard Spahr LLP | Attorney Advertising

Written by:

Ballard Spahr LLP
Contact
more
less

Ballard Spahr LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!