The draft of the CFPB Reform Act of 2026 includes provisions that clarify the Consumer Financial Protection Bureau’s duty to perform a cost-benefit analysis (CBA) of proposed rules. Addressing the bureau’s carelessness in conducting CBAs should improve the quality and stability of its rules, so this change is overdue. 

The improvements will be greatest if the bureau does not enact rules that fail a CBA. However, subsections 103 (5)(A) (viii) and (ix) require the bureau to publish the justification for a rule enacted even when a CBA shows that another rule would be better or the rule’s costs exceed its benefits. This implies that the bureau may enact rules that fail a CBA, reducing the effectiveness of the reforms. 

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Much has changed for crypto in Washington since the current Trump administration took office. The enforcement campaign against the major exchanges has wound down; rulemaking has begun to replace litigation as the instrument of policy; and Congress has at last supplied rules for stablecoins. What has not changed is that market structure remains unfinished business, so most improvements rest on the goodwill of regulators rather than on the force of law. The Senate has never come closer to finishing the job than it has this year.

Market structure is the shorthand for a market’s basic legal architecture, meaning the rules that settle which body of law governs a given instrument and who supervises the firms that trade it. Supplying one for crypto is the bulk of what the Digital Asset Market Clarity Act would do. The bill would fix what a digital asset is in the eyes of the law and whether it is subject to the jurisdiction of the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC). This matters because a security carries registration and disclosure duties that a commodity does not.

On August 4, Axios reported that the highly anticipated update of the White House framework for voluntary testing of frontier AI models will not be released to the public. In other words, and as others have put it, the White House is essentially putting the AI testing regime in a black box. This approach contravenes the rule of law, risks becoming as prescriptive as a licensing regime, and, most importantly, fails to fulfill its most basic objective: to build trust in the population.

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Automated pricing tools are becoming increasingly ubiquitous in the modern economy as many businesses automate their pricing strategies to ensure their prices reflect market realities. Media attention, regulatory proposals, and a timely congressional hearing have largely focused on “surveillance pricing” and what we discussed as individualized dynamic pricing (IDP) in a previous blog. Despite fears of price gouging, these pricing methods have real efficiency benefits and are particularly effective at reducing waste.

However, there are other forms of automated tools in our day-to-day lives that do not necessarily rely on individuals’ data, as IDP does. This piece will focus on algorithmic pricing, understood as the general practice of automating the price-setting process, and the allegations that it might enable collusion amongst competitors. In the context of general algorithm-powered pricing, this alleged “collusion” typically refers to the use of automated tools to analyze market data to coordinate competitors’ prices. With a few notable exceptions, this is typical competitive behavior. For firms to compete on price, they must be able to track their competitors. Algorithmic pricing reduces the costs associated with monitoring and responding to market conditions. Taken alone, it is just using new technology to make an old process more efficient.

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“Open banking” is a system in which data providers (e.g., banks) allow third-party services (e.g., fintechs) to access a consumer’s data upon the consumer’s request. In 2024, the Consumer Financial Protection Bureau passed an open banking rule requiring data providers to share data with third parties for free. In 2025, the bureau backed off and is now considering alternatives. Early reports say that the new rule will allow data providers to charge third parties for data access over a certain threshold (i.e., third parties can access small amounts of data for free). 

Letting banks charge for data access is good policy because it gives data providers control over their own resources and (hopefully) negotiates market prices (“hopefully” because the bureau has not yet revealed if it will regulate the charges). Markets are founded on property rights and freedom of contract. An open banking rule that stops data providers from charging for data access does not respect either and will not bring market benefits.

Many cities have recently repealed or amended zoning laws that previously served to drive up housing prices. 

One recent study looks at 

how zoning regulations in the Boston metropolitan area of Massachusetts have affected the long-run supply, prices, and rents of single-family and multifamily homes (apartments).

For one, 

loose density restrictions paired with multifamily zoning in the same neighborhood increased the average number of housing units per lot. … Looser height restrictions did not affect housing supply or prices, even when paired with multifamily zoning. These findings suggest that density restrictions limit housing construction in the Boston metro area while height regulations do not.

[The] research also finds that differences in housing prices and rents across boundaries primarily stemmed from strict zoning regulations increasing the average size of housing units. … [Thus,] zoning regulations have increased the size of housing units and driven up housing prices and rents in large portions of the Boston metro area.

Eliminating these distortions would allow for better, market-driven outcomes.

Cross-posted from Substack.

The current outbreak of cyclosporiasis has Americans cutting back on salads and other raw vegetables. Such outbreaks have become routine in recent years, with leafy greens providing the most common pathway for nasty bugs like E. coli, Salmonella, Listeria, and cyclospora. 

Seizing on the latest outbreak, the New York Times recently ran an op-ed by food safety expert Timothy Lytton explaining how such outbreaks occur and what can be done to reduce their occurrence. In Cato’s Regulation magazine last fall, Lytton argued that civil action and private incentives can be used to combat them. In “How Nuisance Law Can Improve Food Safety,” he points out that manure runoff from cattle feedlots and dairy operations sited near produce fields is often the contamination source. 

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