GAO: The Regulatory Flexibility Act and Retrospective Review Policies & Analyses of Six Financial Regulators Need Improvement
From: US GAO | GAO-18-404T
Analyzing Regulatory Burden: Policies and Analyses under the Regulatory Flexibility Act and Retrospective Reviews Could Be Improved
Many RFA-Required Analyses Had Weaknesses
- The evaluations for some rules of economic impact on small entities did not describe or estimate compliance costs. Analyses we reviewed also generally did not evaluate differences in estimated compliance costs for identified alternatives.
- Five of six regulators did not consistently disclose the data sources or methodologies used for estimating the number of subject small entities or compliance costs.
Regulators Have Not Considered the Cumulative Effects of Regulations
An additional limitation in the EGRPRA process we identified was that the depository institution regulators had not assessed the ways in which the cumulative burden of the regulations they administer may have created overlapping or duplicative requirements. Under the current process, the regulators have responded to issues raised about individual regulations based on comments they have received, not on bodies of regulations.
However, congressional intent in tasking regulators with EGRPRA reviews was to ensure they considered the cumulative effect of financial regulations. A 1995 Senate Committee on Banking, Housing, and Urban Affairs report stated while no one regulation can be singled out as being the most burdensome, and most have meritorious goals, the aggregate burden of banking regulations ultimately affects a bank’s operations, its profitability, and the cost of credit to customers.
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