GAO

On October 22, 2019, the U.S. Government Accountability Office (“GAO”) issued two letters concluding that three Federal Reserve Supervision and Regulation letters, SR 12-17: Consolidated Supervision Framework for Large Financial Institutions, SR 14-8: Consolidated Recovery Planning for Certain Large Domestic Bank Holding Companies, and SR 11-7: Guidance on Model Risk Management, are “rules” under the Congressional Review Act (“CRA”) and therefore must be submitted to Congress and the Comptroller General for review before they can take effect.  The GAO letters respond to requests made by several senators for determinations of whether the three SR letters, as well as SR 15-7: Governance Structure of the Large Institution Supervision Coordinating Committee (LISCC) Supervisory Program, are rules under the CRA.  The GAO concluded that SR 15-7 is not a rule under the CRA.

Continue Reading GAO Concludes Three SR Letters Are Rules Under Congressional Review Act

On March 22, 2018, the Government Accountability Office (“GAO”) issued a report on the regulation of financial technology (“fintech”) in response to a request from Congress for more information on “fintech activities.” The report concludes that agencies that regulate fintech firms should coordinate with each other more closely, develop offices of innovation (for agencies that have no already done so), and consider adopting approaches to fintech used in foreign jurisdictions, such as the “regulatory sandbox” approach used by the U.K.’s Financial Conduct Authority. GAO also reports on a few innovation initiatives under consideration by agencies such as the OCC and CFTC.

The GAO’s analysis focuses on the following fintech areas: payments, lending, wealth management and financial advice, and blockchain/distributed ledger technology, including virtual currency.  The report is the product of interviews with over 100 fintech stakeholders, including representatives of fintech firms, financial institutions, trade associations, law firms, consumer groups, and federal and state financial regulators.

Continue Reading GAO Publishes Report on Fintech Regulation

On December 5, 2017, the U.S. Government Accountability Office (“GAO”) issued a letter finding that the Consumer Financial Protection Bureau’s March 21, 2013 Bulletin on Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act is a “rule” for the purposes of the Congressional Review Act (“CRA”), and therefore should have been submitted to

On Tuesday, the Government Accountability Office (“GAO”) issued a report to the House Financial Services Committee (the “Report”) regarding stress tests conducted by the Board of Governors of the Federal Reserve System (the “Fed”).

The Report grew out of a 2014 request from Rep. Jeb Hensarling, Chairman of the House Financial Services Committee, for the GAO to review the Fed’s stress test program because he was concerned that the Fed was not adequately transparent with the banks and the public about the program’s procedures and standards. In response to the request, the GAO conducted a comprehensive review of the Fed’s stress test program that included a review of Fed  rules, guidance, internal policies and procedures, and interviews with Fed staff and officials from 19 banking institutions.

In the final Report, the GAO recommends that the Fed make several changes to its stress test procedures, including increasing transparency with respect to qualitative assessments, evaluating a broader range of severe stress scenarios, and doing more to assess uncertainty associated with the Fed’s internal models for determining the test results.

Continue Reading GAO Issues Report on Fed Stress Tests