The "Paperwork Reduction Act" ("PRA") was promulgated in 1980. The purpose is not only to minimize the burden of paperwork on the public, but also to "ensure that the maximum public interest is obtained from the information created, collected, maintained, used, shared and disseminated by or for the federal government, and to maximize the use of information". Although PRA has a good original intention, it still poses an obstacle to the research and analysis of financial innovation.
According to good public policies, before formulating or amending regulations, opinions are usually collected from consumer advocates, industry, academia, and the public. However, there is an inherent contradiction between trying to solicit opinions from the public and complying with PRA regulations. This contradiction is particularly serious in a world where you use a large number of e-mails, online surveys, and other low-cost, low-impact ways to express one's opinions. E-mailing voluntary questionnaires to twelve industry groups for feedback, or even establishing online comment forms, may trigger PRA requirements and lead to cross-agency processes to ensure that the public is not overburdened with information solicitation pressure. Secondly, PRA procedure requirements are also an important obstacle to regulatory innovation, because PRA's lengthy approval process before consulting the public will delay information collection, resulting in agencies receiving outdated information.
PRA does not allow federal agencies to collect information from the public without specific approval procedures. Federal agencies must obtain OMB's approval before collecting information. Usually, OMB has 60 days to approve or reject the proposed collection request. The PRA approval process requires the following reviews, including assessment of information needs; description of the information to be collected; description of the collection plan; objective and specific public burden estimation, etc.
Then, the agency must evaluate and feedback on the collected information. Including public opinions to evaluate whether this information collection is necessary for the performance of the agency; the accuracy of the agency’s estimation of the proposed burden of information collection; the quality, practicability, and clarity of the information collected. Finally, the agency must publish a notice in the “Federal Register” stating that the agency has submitted comments on the proposed collection of information.
The problem is that it may take 6 to 9 months from the development of the information collection plan to the final approval of the OMB. This does not include the time it takes to determine the information collection goals or prepare to start the PRA approval process. The information request may be outdated before the agent can even start collecting information.
Similar to other regulations, PRA is a federal regulation that can only be revised by Congress. Federal agencies may be the most powerful way to support Congress in revising the PRA, because they are most capable of coordinating and advocating revisions to reduce barriers to information collection while protecting the public from unnecessary onerous requirements.
