A Baton Rouge Regional Regulatory Roundtable Roundup
By David Rostker, Assistant Chief Counsel
The Office of Advocacy kicked off its series of Regional Regulatory Reform Roundtables in Baton Rouge, state capital and political hub of Louisiana. Baton Rouge has a vibrant industrial and service economy, with a population of over 800,000 in the metropolitan area. Small businesses from around the state, and one from neighboring Mississippi, came to discuss their concerns with federal regulations, educate the Office of Advocacy staff on their unique opportunities and challenges, and propose solutions.
Throughout a full day of testimonials, one theme came up over and over again: small businesses need to be treated differently. Advocacy understands that regulations frequently disproportionately impact small businesses, both because fixed compliance costs are spread across fewer employees and less revenue and because small businesses can’t afford full-time and specialized compliance staff. However, the small businesses in Baton Rouge also talked about the many ways in which the regulatory approach to real problems in an industry simply didn’t recognize the different markets and unique products and services that small businesses offer.
In the morning, Advocacy heard from small financial advisors concerned with the impending Fiduciary Rule issued by the Department of Labor. From their point of view, the structure of the rule favors large businesses that have large legal departments to withstand frivolous lawsuits and large compliance departments to fill out the paperwork and have lots of assets under management to finance operations out of fees rather than commissions. They argued that financial advisors just starting out rely on commissions from products like annuities to establish themselves. As a result, the Fiduciary Rule would have the effect of discouraging young people from entering the profession and thus entry of new firms into the market and reducing the services and products available.
Similarly, a small title agent discussed the ways that regulations from the Consumer Financial Protection Bureau have harmed their businesses. Although not directly regulated, title agents provide services to the mortgage broker and servicing industries, so every requirement imposed on that industry is in turn imposed on the title agents, ranging from security requirements, marketing restrictions, and mandatory delays in funds transfers. Small businesses believe that CFPB didn’t consider the effects of their rule on the whole supply chain.
Advocacy heard from small businesses across a variety of other fields, on a wide range of regulations. Some examples included:
- A cigar manufacturer and distributor explained how a Food and Drug Administration rule intended to discourage use of tobacco by minors doesn’t make sense for a product that is neither marketed to nor attractive to minors.
- A vocational school raised concerns about the burden of the Department of Education Gainful Employment rules, when this school’s entire program, curriculum and enrollment are tied to the expressed workforce and training needs of the local business community.
- A heavy transportation company talked about the ways in which the Department of Transportation Hours of Service rule creates untenable situations in their operations because of the unique mix of transit and loading times and the lack of appropriate places to halt their operations to comply with required driver breaks.
- A small pharmacy reminded Advocacy of the difficulties in serving a market increasingly dominated by Pharmacy Benefit Managers, which create barriers for independent pharmacies and compounders and are hastening consolidation in the industry.
These are only a few examples of federal programs and regulations to which small Louisiana businesses sought changes. Few small businesses mentioned the specifics of the President’s Executive Orders or regulatory reform program. They are worried about the burden of federal regulations and hope agencies now have the leadership and tools they need to relieve these burdens.
Advocacy greatly appreciates the participation of all of the small businesses that attended our Roundtable in Baton Rouge and thanks to Renee Amar, Small Business Director, at the Louisiana Association of Business and Industry for making the event a success.
Advocacy was in Louisiana for Regional Regulatory Reform Roundtables June 7-8.
Can’t get to a roundtable near you? Fill out this form and tell us about your federal regulatory burdens. We will pass this information on to the appropriate agency and use it in the planning of upcoming Regional Regulatory Reform Roundtables.
For more information on Advocacy’s mission, our regulatory reform efforts or to find out where the next Regional Regulatory Reform Roundtables will be held, please visit: https://advocacy.sba.gov/regulation/regulatory-reform/.
David Rostker is an Assistant Chief Counsel for Advocacy whose portfolio includes the environment. Rostker can be reached at David.Rostker@sba.gov.
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