12/11/13, "GAO: Dodd-Frank rules escaping review," The Hill, By Julian Hattem
"Congress may not be getting a fair chance to review some financial
regulators’ new rules, according to a Government Accountability Office
The 139-page report
found that some agencies might be allowing major financial regulations
issued under the Dodd-Frank financial reform law to go through the
formal rule-making process with uneven oversight, including the
possibility that they skip being earmarked for congressional review.
Before being issued to the public, most regulations head to the White
House’s Office of Management and Budget (OMB) for an interagency review.
Rules expected to have an annual economic effect of at least $100
million are designated as “major” and can be reviewed — and potentially
rejected — by Congress under the Congressional Review Act.
So far, 36 Dodd-Frank regulations have been considered major rules.
the GAO, which acts as Congress’s investigative arm, found that for
some Dodd-Frank regulations, federal agencies and the OMB “may not be
consistently determining which rules are considered major rules under
the Congressional Review Act.”
The budget office “does not address
whether independent agencies should submit all rules for review or how
they should apply major rule criteria,” the GAO found. As a result, some
agencies might be submitting their rules for an interagency review and
others might not.
The GAO found different rules that seemed to have similar economic impacts “but were not similarly classified as major.”
issues raise the risk of some rules not being properly classified as
major, limiting Congress's ability to review these rules before they
The GAO suggests that the budget office issue
new guidance to standardize how agencies determine which rules will be
determined to be major regulations.
“In the absence of such
guidance, we found that federal financial regulators may have used
different processes for submitting their rules and analyses to OMB, and
for applying [Congressional Review Act] criteria,” it said. “These
inconsistent processes could lead to the inconsistent classification of
The report notes that the OMB “disagreed” about the
need for such guidance and denied that its classification of major rules
The GAO report also criticized federal
regulators’ lack of preparations for determining whether or not their
rules have been effective.
In 2011, the GAO suggested that
regulatory agencies determine how they will measure the effectiveness
and impact of Dodd-Frank regulations. Wednesday’s report found that they
have not done that.
“GAO maintains that doing so would position
the regulators to make their future retrospective reviews as robust as
possible,” it said."