The reviews of regulatory effects on small institutions that financial agencies are required to conduct under the Regulatory Flexibility Act are often limited or incomplete, according to a Government Accountability Office report today. The GAO reviewed rulemakings issued by the Federal Reserve, FDIC, OCC, the Consumer Financial Protection Bureau, the Securities and Exchange Commission and the Commodity Futures Trading Commission.
In many cases, the GAO found that financial regulators conducted only limited evaluations of the potential economic effects of regulation and alternative regulatory approaches. Five of the six agencies surveyed did not disclose data sources or methodologies used for their analyses and were unable to provide documentation to support their analysis, the report added.
GAO made 10 recommendations to help the agencies meet RFA requirements, noting that “regulators will be in a better position to minimize any significant economic impact of a rule on the small entities that the statute seeks to ensure.” ABA has previously raised concerns about regulators’ RFA analyses and has long advocated for more rigorous examination of the effects of rulemaking on community banks and other small institutions.