Congress’ watchdog agency found weaknesses in federal financial and consumer agency regulatory reviews under Regulatory Flexibility Act (RFA) and Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) and recommended changes for improvement, an official told the House Small Business Committee in a hearing today.
Michael Clements, director of financial markets and community investment at the Government Accountability Office (GAO), delivered testimony that draws on findings of a January GAO report (GAO-18-256: Procedures for Reviews Under Regulatory Flexibility Act Need to Be Enhanced) and another this month (GAO-18-213: Regulators Could Take Additional Steps to Address Compliance Burdens – reported here today). The GAO said agencies generally agreed to the recommendations it offered for improvement.
The RFA requires federal agencies, including financial regulators, to conduct a regulatory flexibility analysis of a rule’s potential impact on small entities and consider alternatives that may minimize any significant economic impact on such entities. Alternatively, agencies may certify that a rule would not have a significant economic impact on a substantial number of small entities. Reviews of those rules found to have such impact are also required within 10 years of publication.
The EGRPRA requires the Federal Reserve (Fed), Federal Deposit Insurance Corp. (FDIC) and the Office of the Comptroller of the Currency (OCC) to review regulations at least every 10 years and identify areas that are outdated, unnecessary, or unduly burdensome on insured institutions. The National Credit Union Administration (NCUA) has also conducted EGRPRA reviews, though it is not required to do so.
Agencies noted in these reports include the above as well as the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and Consumer Financial Protection Bureau (CFPB).