Businesses following the activities of the Consumer Financial Protection Bureau (CFPB) might be feeling like the dog from the Foghorn Leghorn cartoon. They aren't sure what direction the agency will go.

Capital Markets Competitiveness President and CEO David Hirschmann and U.S. Chamber Institute for Legal Reform President Lisa Rickard sent a letter to CFPB director Richard Cordray, laying out two possible directions. They write:

There is a “right way” for the Bureau to go about its work—establishing rules for business that are clear, consistent, and innovation-friendly, and under which the choices for consumers and small businesses are transparent and robust; and a “wrong way” for the Bureau to conduct itself that could lead to duplicative or even contradictory layers of regulation for already struggling businesses, and a contraction in the availability of credit, for both consumers and small businesses.

Hirschmann’s and Rickard’s guidelines can be boiled down to two paths:

The Right way

• Simplify Disclosure
• Don’t Substitute Uncertainty for Currently-Clear “Rules of the Road”
• Preserve Credit Availability and Choice for Consumers and Small Businesses
• Focus Enforcement Activity on Fraudsters
• Reduce Regulatory Burden through Consolidation and Coordination
• Use Examination Authority Effectively
• Investigate Litigation Financing
• Consolidate and Strengthen Financial Literacy Programs
• Focus on Rigorous Cost-Benefit Analysis/Small Business Impact

The Wrong Way

• Limit Options in the Market/Ban Legitimate Products or Services
• Reduce Availability of Credit for Small Businesses
• Allow 51 AGs to Define Inconsistent Standards
• Treat Safety and Soundness Considerations as an Afterthought
• Allow for Duplicative Regulations and Enforcement

These recommendations can help lift the fog on the CFPB's regulatory direction so businesses aren’t lost and can focus on what they do best: grow the economy and create jobs.