Editor: David Reiss
Brooklyn Law School

January 28, 2013

GAO Report on Challenges for Financial Regulatory Reform

By David Reiss

The GAO has issued a report, Financial Regulatory Reform:  Regulators Have Faced Challenges Finalizing Key Reforms and Unaddressed Areas Pose Potential Risks.  The report notes that

A variety of challenges have affected regulators’ progress in executing rulemaking requirements intended to implement the act’s reforms. Regulators to whom we spoke indicated that the primary challenges affecting the pace of implementing the act’s reforms include the number and complexity of the rulemakings required and the time spent coordinating with regulators and others. In addition, some regulators identified additional challenges, including extensive industry involvement through comment letters and litigation resulting from rulemakings, concurrently starting up a new regulatory body and assuming oversight responsibilities, and resource constraints.  (23)

These challenges are only compounded by the recent court decision that throws CFPB rulemaking into a pit of uncertaintly.  While the decision addresses the legality of NLRB recess appointments, it clearly implicates the appointment of Richard Cordray as the Director of the CFPB.  This has serious consequences for Bureau rulemaking which cannot be occur without a Bureau Director being in place.  (See Dodd-Frank section 1022(b)(1), codified at 12 U.S.C. section 5512(b)(1))

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