GAO Criticizes the Regulatory Flexibility Act Analyses of Financial Regulators

From: US GAO

Financial Services Regulations:
Procedures for Reviews under Regulatory Flexibility Act Need to Be Enhanced

GAO-18-256: Published: Jan 30, 2018. Publicly Released: Jan 30, 2018.

What GAO Found

To comply with the Regulatory Flexibility Act (RFA), agencies generally must assess the rule’s potential impact on small entities and consider alternatives that may minimize any significant economic impact of the rule (regulatory flexibility analyses). Alternatively, agencies may certify that a rule would not have a significant economic impact on a substantial number of small entities. GAO found several weaknesses with the analyses of six financial regulators (Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Securities and Exchange Commission, Commodity Futures Trading Commission, and Consumer Financial Protection Bureau) that could undermine the goal of RFA and limit transparency and public accountability, as shown in the following examples.

CFPB Chief Mulvaney Says Days of ‘Pushing the Envelope’ Are Over

From: Bloomberg

By Robert Schmidt

  • Agency won’t assume firms are ‘bad guys,’ he writes in WSJ
  • Acting chief lays out his vision for controversial regulator

The acting head of the U.S. Consumer Financial Protection Bureau pledged to tone down the agency’s aggressive regulatory and enforcement stance, a posture that has been decried by many of the companies it oversees.

Writing an op-ed in the Wall Street Journal, Mick Mulvaney said he would continue to make sure the bureau enforces consumer protection laws. But, he added, it will not assume that “the bad guys” are the financial services firms it supervises — a belief he attributed to the Democrats who had run the CFPB since it was created in 2010.

CFPB Leadership Dispute: Impacts and Next Steps – An Update

From: Lexology

Max BoniciKevin Petrasic and Benjamin Saul | White & Case LLP

On January 10, 2018, a federal judge denied Consumer Financial Protection Bureau (CFPB or Bureau) Deputy Director Leandra English’s motion for a preliminary injunction to prevent (1) Mick Mulvaney from serving as CFPB Acting Director and (2) President Trump from nominating another to fill that role temporarily under the Federal Vacancies Reform Act (Vacancies Act). On January 12, English filed a notice of appeal to the DC Circuit Court of Appeals (DC Circuit). This decision, which follows Judge Kelly’s November 2017 denial of a temporary restraining order (TRO) on similar grounds, preserves Mulvaney’s Acting Directorship, pending review by the DC Circuit. While English’s appeal plays out in court, Judge Kelly’s order maintains the apparent status quo at the Bureau and reinforces Mulvaney’s authority, including current reform efforts at the Bureau focused on—among other things—the review of pending rulemakings, investigations, and key policy issues.

Mnuchin says financial regulators will probe impact of cryptocurrencies

Editor’s Note: Cross-posted from FISMA Focus/Regulatory Cybersecurity.

From: The Hill

Treasury Secretary Steven Mnuchin said Friday that an interagency group of regulators is reviewing the impact of cryptocurrencies like bitcoin on the United States financial system.

Mnuchin, during an interview at the Economic Club of Washington, said that the Financial Stability Oversight Council (FSOC) created a working group to examine digital currencies like bitcoin.

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