DODD-FRANK 

REGULATIONS

Agencies Conducted 

Regulatory Analyses 

and Coordinated but

Could Benefit from 

Additional Guidance 

on Major Rules

Report to Congressional Addressees

December 2013

GAO-14-67

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-67, a report to 

congressional addressees

December 2013

DODD-FRANK REGULATIONS

Agencies Conducted Regulatory Analyses and 

Coordinated but Could Benefit from Additional 

Guidance on Major Rules

Why GAO Did This Study

The 2010 Dodd-Frank Act requires or 

authorizes various federal agencies to 

issue hundreds of rules to implement 

reforms intended to strengthen the 

financial services industry. As 

amended by Public Law No. 112-10, 

the act also mandates that GAO 

annually study financial services 

regulations. This report examines (1) 

the regulatory analyses agencies 

conducted in their Dodd-Frank 

rulemakings; (2) interagency 

coordination on such rulemakings and 

by CFPB in its supervision activities; 

and (3) the possible impact of selected 

Dodd-Frank provisions and related 

rules and agency plans to assess 

Dodd-Frank Act rules retrospectively. 

GAO identified and reviewed 70 DoddFrank rules that became effective from 

July 24, 2012, through July 22, 2013, 

to determine whether the required 

regulatory analyses and coordination 

were conducted; examined CFPB’s 

policies, procedures, and other 

materials; developed indicators on the 

impact of the act’s systemic riskrelated provisions and rules; conducted 

a regression analysis to assess the 

act’s impact on large bank holding 

companies; and interviewed federal 

financial regulators and officials from 

the U.S. Department of the Treasury, 

the Financial Stability Oversight 

Council, and OMB.

What GAO Recommends

GAO recommends that OMB issue 

guidance to help standardize CRA

processes. OMB disagreed such 

guidance is needed, in part because 

GAO did not identify inconsistencies in 

major rule designations. GAO 

maintains that the identified process 

inconsistencies could lead to differing 

designations under CRA, and its 

recommendation helps ensure 

consistency in designating major rules. 

What GAO Found

Federal agencies conducted the required regulatory analyses for all rules issued 

pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act 

(Dodd-Frank Act) that GAO identified and reviewed. However, the Office of 

Management and Budget (OMB), in coordination with the agencies, may not be 

consistently determining which rules are considered major rules under the 

Congressional Review Act (CRA). Under the act, Congress is allowed to review 

major rules before they become effective. The act outlines criteria for determining 

whether a rule is major, such as whether it will result in an annual effect on the 

economy of $100 million or more. OMB is responsible for determining which rules 

are major under CRA but relies on agency analyses to help make the 

determination. OMB guidance does not address whether independent agencies 

should submit all rules for review or how they should apply major rule criteria. 

GAO found that some independent agencies submitted all their rules to OMB, but 

others did not. GAO also found inconsistencies in how these agencies applied 

the CRA criteria. For example, GAO found rules issued by different agencies that 

had similar economic impacts but were not similarly classified as major. These 

issues raise the risk of some rules not being properly classified as major, limiting 

Congress’s ability to review these rules before they become effective. 

Federal regulators coordinated on 49 rulemakings pursuant to the Dodd-Frank 

Act or voluntarily. As required by the act, the Consumer Financial Protection 

Bureau (CFPB) established a framework to coordinate its supervision activities 

with prudential regulators and is establishing a similar framework to coordinate 

with state regulators. In May 2012, CFPB and prudential regulators entered into 

an agreement that specifies how they plan to meet the act’s coordination 

requirements for the supervision of large banks (i.e., more than $10 billion in 

assets). CFPB has entered into similar agreements with state regulators to 

coordinate examinations of banks and nonbank financial entities.

The Dodd-Frank Act has not been fully implemented and its full impact remains 

uncertain. Using recently released data, GAO updated its prior report’s indicators 

monitoring certain risk characteristics of large U.S. bank holding companies. 

Although changes in the indicators are not evidence of causal links to the act’s 

provisions, some indicators suggest these companies, on average, have 

decreased their leverage and enhanced their liquidity since the act’s passage. 

Moreover, GAO’s updated regression analysis suggests that the act continued to 

have little effect on the funding costs of large U.S. bank holding companies but 

may have helped improve their safety and soundness. Based on its analysis of 

the act and market data, GAO also developed new indicators for this report to 

monitor the extent to which certain of the act’s swap reforms are associated with 

their intended outcomes. These indicators establish baselines for measuring 

future changes. Finally, GAO examined federal financial regulators’ plans to 

conduct retrospective reviews of their Dodd-Frank rules. Executive Order 13,579 

asks independent agencies, including federal financial regulators, to develop 

plans to conduct retrospective reviews of existing rules that may be excessively 

burdensome or costly. Regulators have varied in their approaches and progress 

in developing and implementing such plans. Given the importance of such 

reviews, GAO recommended in 2011 that the regulators determine how they will 

measure the impact of Dodd-Frank regulations in their plans, but they have not 

done so to date. GAO maintains that doing so would position the regulators to 

make their future retrospective reviews as robust as possible.

View GAO-14-67. For more information, 

contact A. Nicole Clowers at (202) 512-8678 

or clowersa@gao.gov.
Page i GAO-14-67 Dodd-Frank Regulations

Letter 1 

Background 6

Agencies Conducted Required Regulatory Analyses but May Not Be 

Identifying All Major Rules 13

Regulators Continue to Coordinate on Rulemakings 20

Impacts of the Dodd-Frank Act Are Uncertain, and Regulators Are 

Developing Plans to Review Rules Retrospectively 34

Conclusions 60

Recommendations for Executive Action 60

Agency Comments and Our Evaluation 61

Appendix I Objectives, Scope, and Methodology 67

Appendix II Dodd-Frank Rules Effective as of July 22, 2013 72

Appendix III Dodd-Frank Rules Classified as Major, Final as of 

July 22, 2013 87

Appendix IV Interagency Coordination for Dodd-Frank Rules Effective 

on July 24, 2012, through July 22, 2013 89

Appendix V Summary of Rulemakings Related to Selected Dodd-Frank 

Provisions Applicable to Systemically Important Financial 

Institutions 98

Appendix VI Trends in GAO Indicators for Bank SIFIs 103

Appendix VII Econometric Analyses of the Impact of Enhanced 

Regulation and Oversight on SIFIs 117

Contents 
Page ii GAO-14-67 Dodd-Frank Regulations

Appendix VIII Dodd-Frank Rules Implementing Central Clearing, Capital, 

and Margin Swap Reforms 126

Appendix IX Comments from the Financial Stability Oversight Council 128

Appendix X Comments from the National Credit Union Administration 130

Appendix XI GAO Contact and Acknowledgments 131

Tables

Table 1: Prudential Regulators and Their Basic Functions 7

Table 2: Summary of Trends in Indicators for Bank SIFIs, from 

Third Quarter 2010 through Second Quarter 2013 38

Table 3: Estimated Changes in U.S. Bank SIFIs’ Funding Costs and 

Measures of Safety and Soundness Associated with the 

Dodd-Frank Act, from Third Quarter 2010 through Second 

Quarter 2013 41

Table 4: Dodd-Frank Rules Effective from July 24, 2012, through 

July 22, 2013 72

Table 5: Dodd-Frank Rules Effective from July 22, 2011, through 

July 23, 2012 77

Table 6: Dodd-Frank Rules Effective as of July 21, 2011 84

Table 7: Dodd-Frank Rules Classified as Major, Final as of July 22, 

2013 87

Table 8: Evidence of Interagency Coordination in Dodd-Frank 

Regulations Effective July 24, 2012, through July 22, 2013 89

Table 9: Rulemakings Implementing Selected Dodd-Frank 

Provisions Applicable to Systemically Important Financial 

Institutions and Their Status as of November 29, 2013 98

Table 10: Number and Median Size of U.S. Bank Holding 

Companies and Bank SIFIs as of Third Quarter 2010, 

Second Quarter 2012, and Second Quarter 2013 (Assets in 

Billions of Constant 2013 Q2 Dollars) 106

Table 11: 2013 Large Bank SIFIs’ Foreign Legal Entities, as of June 

30, 2010, June 30, 2012, and June 30, 2013 110
Page iii GAO-14-67 Dodd-Frank Regulations

Table 12: Estimated Changes in U.S. Bank SIFIs’ Funding Costs and 

Measures of Safety and Soundness Associated with the 

Dodd-Frank Act, from Third Quarter 2010 through Second 

Quarter 2013 122

Table 13: Estimated Changes in Bank SIFIs’ Capital Adequacy 

Indicators Associated with the Dodd-Frank Act, from 

Third Quarter 2010 through Second Quarter 2013 124

Table 14: Estimated Changes in Bank SIFIs’ Funding Cost and 

Safety and Soundness Indicators Associated with the 

Dodd-Frank Act, from Third Quarter 2010 through Second 

Quarter 2013 125

Table 15: Select Dodd-Frank Rules Implementing Central Clearing 

Swap Reforms Final as of November 15, 2013 126

Table 16: Select Dodd-Frank Rules Implementing Capital and 

Margin Swap Reforms Proposed as of November 15, 2013 127

Figures

Figure 1: Overview of Clearing, Trading, and Reporting 

Requirements under Dodd-Frank Swaps Reforms 44

Figure 2: Trends in Central Clearing of Interest Rate Swaps (by 

Percentage of Gross Notional Value of Swaps), from 

January 2013 through August 2013 49

Figure 3: Percentage of Credit Default Swaps Centrally Cleared (by 

Gross Notional Value of Swaps), from January 2013 

through August 2013 50

Figure 4: Fair Value of Collateral as a Percentage of Net Current 

Credit Exposure from OTC Derivatives Contracts for All 

Counterparty Types Combined, from Second Quarter 2009 

through Second Quarter 2013 52

Figure 5: Fair Value of Collateral as a Percentage of Net Current 

Credit Exposure from OTC Derivatives Contracts by 

Counterparty Type, from Second Quarter 2009 through 

Second Quarter 2013 53

Figure 6: 2013 U.S. Bank SIFIs’ Total Assets, as of Second Quarter 

2013 105

Figure 7: Median Market Share for U.S. Bank Holding Companies 

by Size, from First Quarter 2006 through Second Quarter 

2013 107

Figure 8: 2013 U.S. Bank SIFIs’ Total Legal Entities, as of June 30, 

2010, June 30, 2012, and June 30, 2013 109
Page iv GAO-14-67 Dodd-Frank Regulations

Figure 9: Median Tangible Common Equity as a Percentage of Total 

Assets for Bank Holding Companies by Size, from First 

Quarter 2006 through Second Quarter 2013 112

Figure 10: Median Tangible Common Equity as a Percentage of 

Risk-Weighted Assets for Bank Holding Companies by 

Size, from First Quarter 2006 through Second Quarter 

2013 113

Figure 11: Median Short-Term Liabilities as a Percentage of Total 

Liabilities for U.S. Bank Holding Companies by Size, from 

First Quarter 2006 through Second Quarter 2013 115

Figure 12: Median Liquid Assets as a Percentage of Short-term 

Liabilities for U.S. Bank Holding Companies by Size, from 

First Quarter 2006 through Second Quarter 2013 116
Page v GAO-14-67 Dodd-Frank Regulations

Abbreviations

CDS credit default swaps

CFPB Consumer Financial Protection Bureau

CFTC Commodity Futures Trading Commission

CRA Congressional Review Act

CSBS Conference of State Bank Supervisors

Dodd-Frank Act Dodd-Frank Wall Street Reform and Consumer 

 Protection Act 

EGRPRA Economic Growth and Regulatory Paperwork 

 Reduction Act of 1996

E.O. Executive Order

FDIC Federal Deposit Insurance Corporation

Federal Reserve Board of Governors of the Federal Reserve System

FSOC Financial Stability Oversight Council

MOU memorandum of understanding

NCUA National Credit Union Administration

OCC Office of the Comptroller of the Currency

OMB Office of Management and Budget

OTC over-the-counter

PRA Paperwork Reduction Act

RFA Regulatory Flexibility Act

SEC Securities and Exchange Commission

SIFI systemically important financial institutions

Treasury U.S. Department of the Treasury

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Page 1 GAO-14-67 Dodd-Frank Regulations

441 G St. N.W.

Washington, DC 20548

December 11, 2013

Congressional Addressees

The Dodd-Frank Wall Street Reform and Consumer Protection Act (DoddFrank Act) of 2010 requires federal agencies to issue hundreds of 

regulations to implement the act’s requirements.1 The act responds to the 

2007-2009 financial crisis that disrupted the U.S. financial system and 

threatened not only the solvency of some large financial institutions but 

also the health of the U.S. economy. Although the financial services 

industry, academics, and others generally have supported the DoddFrank Act’s goal of enhancing the stability of the U.S. financial system, 

the act’s provisions and their implementation have been subject to 

debate. For example, no consensus exists on the extent to which the act 

will help reduce the likelihood and severity of future financial crises or on 

the magnitude of the costs that the act and its regulations—individually 

and cumulatively—will impose on U.S. financial institutions and the 

economy.2

Federal rulemaking is subject to multiple statutory requirements and 

executive orders. However, the extent to which the federal financial 

regulators and other federal agencies are subject to these requirements 

varies.

Additionally, some market observers have raised concerns 

about the pace of reform, with some suggesting that reform is occurring 

too slowly and others arguing that it is moving too quickly.

3

 

1

Pub. L. No. 111-203, 124 Stat. 1376 (2010). We identified 236 provisions of the DoddFrank Act that require regulators to issue rulemakings across nine key areas. See GAO, 

Financial Regulatory Reform: Regulators Have Faced Challenges Finalizing Key Reforms 

and Unaddressed Areas Pose Potential Risks, 

For example, the Paperwork Reduction Act (PRA) and the 

Regulatory Flexibility Act (RFA) impose regulatory analysis requirements 

GAO-13-195 (Washington, D.C.: Jan. 23, 

2013).

2

For example, see GAO, Financial Regulatory Reform: Financial Crisis Losses and 

Potential Impact of the Dodd-Frank Act, GAO-13-180 (Washington, D.C.: Jan. 16, 2013).

3

We use the term “federal financial regulators” to refer to the Consumer Financial 

Protection Bureau, Commodity Futures Trading Commission, Federal Deposit Insurance 

Corporation, Board of Governors of the Federal Reserve System, Office of the Comptroller 

of the Currency, National Credit Union Administration, and Securities and Exchange 

Commission. 

 
 

Page 2 GAO-14-67 Dodd-Frank Regulations

on federal agencies, including the federal financial regulators.4 PRA 

requires agencies to justify collection of information from the public to 

minimize the paperwork burden and estimate the time and expense 

needed to comply with the paperwork requirements contained in their 

rules. RFA requires agencies to assess the impact of their regulation on 

small entities and consider regulatory alternatives to lessen the regulatory 

burden on small entities. Under the Congressional Review Act (CRA), 

before rules can take effect, federal agencies, including the federal 

financial regulators, must submit their rules to Congress and the 

Comptroller General, and rules deemed major by the Office of 

Management and Budget (OMB) generally may not become effective until 

60 days after the rules are submitted.

5 For agencies subject to Executive 

Order 12,866 (E.O. 12,866), such major rules would be considered 

significant regulatory actions and as such would be subject to formal 

benefit-cost analysis.6 However, as independent regulatory agencies, the 

federal financial regulators are not required to comply with executive 

orders.7

 

4

Paperwork Reduction Act of 1995, Pub. L. No. 104-13, 109 Stat. 163 (1995) (codified as 

amended at 44 U.S.C. §§ 3501-3520); Regulatory Flexibility Act, Pub. L. No. 96-354, 94 

Stat. 1164 (1980) (codified as amended at 5 U.S.C. §§ 601-612). 

5

Pub. L. No. 104-121, Tit. II, § 251, 110 Stat. 868 (1996) (codified at 5 U.S.C. §§ 801-

808). As defined by CRA, a major rule is a rule that OMB finds has resulted in or is likely 

to result in (1) an annual effect on the economy of $100 million or more; (2) a major

increase in costs or prices; or (3) significant adverse effects on competition, employment, 

investment, productivity, innovation, or on the ability of U.S.-based enterprises to compete 

with foreign-based enterprises in domestic and export markets. 5 U.S.C. § 804(2). CRA 

requires agencies to submit to both houses of Congress and the Comptroller General, 

before rules can become effective, a report containing (i) a copy of the rule, (ii) a concise 

general statement relating to the rule, including whether it is a major rule, and (iii) the 

proposed effective date of the rule. 5 U.S.C. § 801(a)(1)(A). Rules not classified as major 

take effect as otherwise provided by law after submission to Congress, while rules 

classified as major take effect on the later of 60 days after Congress receives the rule 

report, or 60 days after the rule is published in the Federal Register, as long as Congress 

does not pass a joint resolution of disapproval. 5 U.S.C. § 801(a)(3), (4). CRA also 

mandates that we provide a report to Congress that includes an assessment of an 

agency’s compliance with the CRA process. We do not analyze or comment on the 

substance or quality of rulemaking. We must report to each house of Congress by the end 

of 15 calendar days after a rule’s submission or publication date. 5 U.S.C. § 801(a)(2)(A).

6

Exec. Order No. 12,866, 58 Fed. Reg. 51,735 (Sept. 30, 1993). 

7

Independent regulatory agencies are those defined by 44 U.S.C. § 3502(5). This 

statutory definition was revised by the Dodd-Frank Act to include the Office of the 

Comptroller of the Currency, the Bureau of Consumer Financial Protection, and the Office 

of Financial Research. 
 

Page 3 GAO-14-67 Dodd-Frank Regulations

Section 1573(a) of the Department of Defense and Full-Year Continuing 

Appropriations Act of 2011 amends the Dodd-Frank Act and mandates 

that GAO conduct an annual study of financial services regulations, 

including those of the Consumer Financial Protection Bureau (CFPB).8

We issued our first two reports under this mandate in November 2011 

and December 2012.9

• regulatory analyses conducted by federal agencies in their DoddFrank rulemakings, including their assessments of which rules they 

considered to be major rules;

This report examines the

• interagency coordination by federal agencies in their Dodd-Frank 

rulemakings and by CFPB with other agencies in its supervision 

activities; and

• possible impact of selected Dodd-Frank provisions and their 

implementing regulations and agency plans to assess such 

regulations retrospectively.

To examine agencies’ regulatory analyses and coordination, we focused 

on final Dodd-Frank rules that became effective from July 24, 2012, 

through July 22, 2013, a total of 70 rules. To identify these rules, we used 

a website maintained by the Federal Reserve Bank of St. Louis that 

tracks Dodd-Frank regulations. We corroborated the data with the federal 

agencies and data from their websites.

In examining the regulatory analyses of the federal agencies in our 

review, we reviewed federal statutes, GAO studies, Federal Register

releases, and other material to identify and summarize the regulatory 

analyses federal agencies are required to conduct, and conducted, for 

 

8

Pub. L. No. 112-10, § 1573(a), 125 Stat. 38, 138-39 (2011) (codified at 12 U.S.C. § 

5496b). We are directed to analyze (1) the impact of regulation on the financial 

marketplace, including the effects on the safety and soundness of regulated entities, cost 

and availability of credit, savings realized by consumers, reductions in consumer 

paperwork burden, changes in personal and small business bankruptcy filings, and costs 

of compliance with rules, including whether relevant federal agencies are applying sound 

cost-benefit analysis in promulgating rules; (2) efforts to avoid duplicative or conflicting 

rulemakings, information requests, and examinations; and (3) other matters deemed 

appropriate by the Comptroller General. The focus of our reviews is on the financial 

regulations promulgated pursuant to the Dodd-Frank Act. 

9

GAO, Dodd-Frank Act Regulations: Implementation Could Benefit from Additional 

Analyses and Coordination, GAO-12-151 (Washington, D.C.: Nov. 10, 2011), and DoddFrank Act Regulations: Agencies’ Efforts to Analyze and Coordinate Their Rules, 

GAO-13-101 (Washington, D.C.: Dec. 18, 2012). 
 

Page 4 GAO-14-67 Dodd-Frank Regulations

Dodd-Frank rulemakings. Of the 70 rules within our scope, 59 rules were 

substantive regulations— generally subject to public notice and comment 

under the Administrative Procedure Act—and required the agencies to 

conduct some form of regulatory analysis. Of the 59 rules, 10 were 

classified as major under CRA. For those 10 rules, we compared the 

regulatory analyses against principles in OMB Circular A-4, which 

provides guidance on the development of such analyses.10 To examine 

how OMB, in consultation with federal agencies, classifies rules as major, 

we reviewed CRA, agency analyses, Federal Register releases of DoddFrank major rules, GAO reports, and other materials, and interviewed 

officials from OMB and federal financial regulators. We relied on our 

Federal Rules database to identify all Dodd-Frank rules classified as 

major as of July 22, 2013—36 in total (including the 10 from the specified 

time period mentioned above).11

To examine interagency coordination among the regulators, we reviewed 

the Dodd-Frank Act, Federal Register releases, and GAO reports to 

identify the interagency coordination or consultation requirements for the 

70 rules in our scope. We found evidence of coordination between the 

rulemaking agency and other regulators for 49 of the 70 rules. We 

reviewed the Federal Register releases of the final rules and interviewed 

agency officials to document whether the agencies coordinated with other 

U.S., foreign, or international regulators, either as required by Dodd-Frank 

or on a voluntary basis. To examine steps CFPB took to comply with 

Dodd-Frank requirements for interagency coordination and information 

sharing in its supervision activities, we reviewed the act, CFPB 

documents, and GAO reports. We also interviewed officials from CFPB 

and the prudential regulators about such coordination.

Finally, we took a multipronged approach to analyze what is known about 

the impact of the Dodd-Frank Act on the financial marketplace. First, we 

 

10As independent regulatory agencies that are not required to follow the economic 

analysis requirements of E.O. 12,866, the financial regulators also are not required to 

follow OMB Circular A-4. However, Circular A-4 is an example of best practices for 

agencies to follow when conducting regulatory analyses, and the financial regulators have 

told us that they follow the guidance in spirit. 

11To compile information on all the rules submitted under CRA, we established a database 

and created a standardized submission form to allow more consistent information 

collection. Our Federal Rules database is publicly available at www.gao.gov under Legal 

Decisions & Bid Protests. 
 

Page 5 GAO-14-67 Dodd-Frank Regulations

updated our indicators monitoring changes in certain characteristics of 

systemically important financial institutions (SIFI) that might be affected 

by Dodd-Frank regulations.12 Second, we updated our economic analysis 

estimating changes in the (1) cost of credit provided by bank SIFIs and 

(2) safety and soundness of bank SIFIs. Third, we developed indicators to 

monitor the extent to which certain of the Dodd-Frank’s swap reforms are 

consistent with the act’s goals.13

We conducted this performance audit from January 2013 to December 

2013 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

As new data become available, we 

expect to update and, as warranted, revise our indicators and create 

additional indicators. Fourth, to assess agency plans to conduct 

retrospective reviews of existing rules, we reviewed executive orders; 

OMB guidance; Federal Register releases, policies, and other agency 

documents; and GAO reports. Finally, we interviewed agency officials 

about their plans to conduct retrospective reviews of their Dodd-Frank 

rules. For parts of our methodology involving the analysis of computerprocessed data, we assessed the reliability of these data and determined 

they were sufficiently reliable for our purposes. (See app. I for a detailed 

discussion of our objectives, scope, and methodology.)

 

12The Dodd-Frank Act does not use the term “systemically important financial institution” 

(SIFI). This term is commonly used by academics and other experts to refer to bank 

holding companies with $50 billion or more in total consolidated assets and nonbank 

financial companies designated by the Financial Stability Oversight Council for Federal 

Reserve supervision and enhanced prudential standards under the Dodd-Frank Act. For 

purposes of this report, we refer to these bank and nonbank financial companies as bank 

systemically important financial institutions (bank SIFI) and nonbank systemically 

important financial institutions (nonbank SIFI), respectively. We also refer to nonbank 

SIFIs and bank SIFIs collectively as SIFIs when appropriate.

13A swap is a type of derivative that involves an ongoing exchange of one or more assets, 

liabilities, or payments for a specified period. Financial and nonfinancial firms use swaps 

and other over-the-counter derivatives to hedge risk, or speculate, or for other purposes. 

Swaps include interest rate swaps, commodity-based swaps, and broad-based credit 

default swaps. Security-based swaps include single-name and narrow-based credit default 

swaps and equity-based swaps. For the purposes of this report, we use “swaps” to refer to 

both “swaps” and “security-based swaps.” 
 

Page 6 GAO-14-67 Dodd-Frank Regulations

The U.S. financial regulatory structure is a complex system of multiple 

federal and state regulators as well as self-regulatory organizations that 

operates largely along functional lines. That is, financial products or 

activities generally are regulated according to their function, no matter 

which entity offers the product or participates in the activity. The 

functional regulator approach is intended to provide consistency in 

regulation, focus regulatory restrictions on the relevant functional areas, 

and avoid the potential need for regulatory agencies to develop expertise 

in all aspects of financial regulation.

In the banking industry, the specific regulatory configuration generally 

depends on the type of charter the banking institution chooses. 

Depository institution charter types include

• commercial banks, which originally focused on the banking needs of 

businesses but over time have broadened their services;

• thrifts, which include savings banks, savings associations, and 

savings and loans and were originally created to serve the needs—

particularly the mortgage needs—of those not served by commercial 

banks; and

• credit unions, which are member-owned cooperatives run by memberelected boards with an historical emphasis on serving people of 

modest means.

Charters may be obtained at the state or federal level. State regulators 

charter institutions and participate in the institutions’ oversight, but all 

institutions that have federal deposit insurance have a federal prudential 

regulator. The federal prudential regulators—which generally may issue 

regulations and take enforcement actions against industry participants 

within their jurisdiction—are identified in table 1. Additionally, the Federal 

Deposit Insurance Corporation (FDIC) insures deposits in banks and 

thrifts, while the National Credit Union Administration (NCUA) insures

deposits in federal and most state-chartered credit unions.

Background 

Financial Services 

Regulation 

Prudential Regulators
 

Page 7 GAO-14-67 Dodd-Frank Regulations

Table 1: Prudential Regulators and Their Basic Functions

Agency Basic function

Office of the Comptroller of the 

Currency

Charters and supervises national banks and federal thrifts.

Board of Governors of the Federal 

Reserve System 

Supervises state-chartered banks that opt to be members of the Federal Reserve System, 

bank holding companies, thrift holding companies and the nondepository institution 

subsidiaries of those institutions, and nonbank financial companies designated as 

systemically important financial institutions by the Financial Stability Oversight Council.

Federal Deposit Insurance Corporation Supervises FDIC-insured state-chartered banks that are not members of the Federal Reserve 

System, as well as federally insured state savings banks and thrifts; insures the deposits of 

all banks and thrifts that are approved for federal deposit insurance; and resolves all failed 

insured banks and thrifts and has been given the authority to resolve large bank holding 

companies and nonbank financial companies that are subject to supervision by the Board of 

Governors of the Federal Reserve System and subject to enhanced prudential standards.

National Credit Union Administration Charters and supervises federally chartered credit unions and insures savings in federal and 

most state-chartered credit unions.

Source: GAO.

Holding companies that own or control a bank or thrift are subject to 

supervision by the Board of Governors of the Federal Reserve System 

(Federal Reserve). The Bank Holding Company Act of 1956 and the 

Home Owners’ Loan Act set forth the regulatory frameworks for bank 

holding companies and savings and loan holding companies, 

respectively.14 The Dodd-Frank Act made the Federal Reserve the 

regulator of savings and loan holding companies and amended the Home 

Owners’ Loan Act and the Bank Holding Company Act to create certain 

similar requirements for both bank holding companies and savings and 

loan holding companies.15

The securities and futures markets are regulated under a combination of 

self-regulation (subject to oversight by the appropriate federal regulator) 

 

14Bank Holding Company Act of 1956, Pub. L. No. 84-511, 70 Stat. 133 (1956) (codified 

as amended at 12 U.S.C. §§ 1841-1852); Home Owners’ Loan Act, Pub. L. No. 73-43, 48 

Stat. 128 (1933) (codified as amended at 12 U.S.C. §§ 1461-1470). Bank holding 

companies are companies that own or control a bank, as defined in the Bank Holding 

Company Act. 12 U.S.C. § 1841(a)(1), (c). Savings and loan holding companies are 

companies that directly or indirectly control a savings association. 12 U.S.C. § 

1467a(a)(1)(D).

15For a more detailed discussion of the regulatory framework for bank holding companies 

and savings and loan holding companies, see GAO, Bank Holding Company Act: 

Characteristics and Regulation of Exempt Institutions and the Implications of Removing 

the Exemptions, GAO-12-160 (Washington, D.C.: Jan. 19, 2012). 

Securities and Futures 

Regulators 
 

Page 8 GAO-14-67 Dodd-Frank Regulations

and direct oversight by the Securities and Exchange Commission (SEC) 

and Commodity Futures Trading Commission (CFTC), respectively.16

CFTC is the primary regulator of futures markets, including futures 

exchanges and intermediaries, such as futures commission merchants.

SEC regulates the securities markets, including participants such as 

securities exchanges, broker-dealers, investment companies, and 

investment advisers. SEC’s mission is to protect investors; maintain fair, 

orderly, and efficient markets; and facilitate capital formation. SEC also 

oversees self-regulatory organizations—including securities exchanges, 

clearing agencies, and the Financial Industry Regulatory Authority—that 

have responsibility for overseeing securities markets and their members; 

establishing the standards under which their members conduct business; 

monitoring business conduct; and bringing disciplinary actions against 

members for violating applicable federal statutes, SEC’s rules, and their 

own rules.

17

The Dodd-Frank Act established CFPB as an independent bureau within 

the Federal Reserve System and provided it with rule-making, 

enforcement, supervisory, and other powers over many entities that 

CFTC’s mission is to protect market users and the public from fraud, 

manipulation, abusive practices, and systemic risk related to derivatives 

subject to the Commodity Exchange Act, and to foster open, competitive, 

and financially sound futures markets. Like SEC, CFTC oversees the 

registration of intermediaries and relies on self-regulatory organizations, 

including the futures exchanges and the National Futures Association, to 

establish and enforce rules governing member behavior. In addition, Title 

VII of the Dodd-Frank Act expands regulatory responsibilities for CFTC 

and SEC by establishing a new regulatory framework for swaps. The act 

authorizes CFTC to regulate “swaps” and SEC to regulate “securitybased swaps” with the goals of reducing risk, increasing transparency, 

and promoting market integrity in the financial system.

 

16Certain securities activities also are overseen by state government entities. 

17Futures commission merchants are individuals, associations, partnerships, corporations, 

and trusts that solicit or accept orders for the purchase or sale of a commodity for future 

delivery, among other products, on or subject to the rules of any exchange and that accept 

payment from or extend credit to those whose orders are accepted. 7 U.S.C. § 1a(28). 

Firms and individuals who trade futures with the public or give advice about futures trading 

must be registered with the National Futures Association, the industrywide self-regulatory 

organization for the U.S. futures industry. 

Consumer Financial Protection 

Bureau 
 

Page 9 GAO-14-67 Dodd-Frank Regulations

provide consumer financial products and services.18 Certain consumer 

financial protection functions from seven federal agencies were 

transferred to CFPB.19

The Dodd-Frank Act established FSOC to identify risks to the financial 

stability of the United States, promote market discipline, and respond to 

emerging threats to the stability of the U.S. financial system. The DoddFrank Act also established the Office of Financial Research within the 

U.S. Department of the Treasury (Treasury) to serve FSOC and its 

member agencies by improving the quality, transparency, and 

accessibility of financial data and information; conducting and sponsoring 

research related to financial stability; and promoting best practices in risk 

management.

CFPB has authority to supervise companies in the 

mortgage, payday lending, and private student lending markets. As such, 

CFPB is authorized to supervise certain nonbank consumer financial 

service companies and insured depository institutions and credit unions 

with over $10 billion in assets and their affiliates for compliance with 

federal consumer financial protection laws and related purposes. CFPB 

does not have authority over most insurance activities or most activities 

conducted by firms regulated by SEC or CFTC.

20 FSOC’s membership consists of the Secretary of the 

Treasury, who chairs the council; the heads of CFPB, CFTC, FDIC, the 

Federal Reserve, the Federal Housing Finance Agency, NCUA, the Office 

of the Comptroller of the Currency (OCC), and SEC; the directors of the 

Office of Financial Research and the Federal Insurance Office; 

representatives from state-level financial regulators; and an independent 

member with insurance experience.

Under the Dodd-Frank Act, federal financial regulatory agencies are 

directed or have the authority to issue hundreds of regulations to 

implement the act’s provisions. In some cases, the act gives the agencies 

 

1812 U.S.C. §§ 5481–5603. 

19These agencies included the Federal Reserve, FDIC, Federal Trade Commission, 

Department of Housing and Urban Development, NCUA, the Office of the Comptroller of 

the Currency, and Office of Thrift Supervision. 

2012 U.S.C. §§ 5321–5333. For additional information on FSOC and the Office of 

Financial Research see GAO, Financial Stability: New Council and Research Office 

Should Strengthen the Accountability and Transparency of Their Decisions, GAO-12-886 

(Washington, D.C.: Sept. 11, 2012). 

Financial Stability Oversight 

Council (FSOC)

Dodd-Frank Regulations
 

Page 10 GAO-14-67 Dodd-Frank Regulations

little or no discretion in deciding how to implement the provisions. For 

instance, the Dodd-Frank Act made permanent a temporary increase in 

the FDIC deposit insurance coverage amount ($100,000 to $250,000); 

therefore, FDIC revised its implementing regulation to conform to the 

change. However, other rulemaking provisions in the act appear to be 

discretionary in nature, stating that (1) certain agencies may issue rules to 

implement particular provisions or that the agencies may issue 

regulations that they decide are “necessary and appropriate;” or (2) 

agencies must issue regulations to implement particular provisions but 

have some level of discretion over the substance of the regulations. As a 

result, for these rulemaking provisions, the agencies may decide to 

promulgate rules for some or all of the provisions, and may have broad 

discretion to decide what these rules will contain and what exemptions, if 

any, will apply.

As mentioned earlier, federal agencies generally must conduct regulatory 

analysis pursuant to PRA and RFA, among other statutes, as part of their 

rulemakings.21 PRA and RFA require federal agencies, including financial 

regulators, to assess various impacts and costs of their rules. However, 

the statutes do not require the agencies to conduct formal benefit and 

cost analyses that require identification and assessment of alternatives.22

In addition to these requirements, authorizing or other statutes require 

certain federal financial regulators to consider specific benefits, costs, and 

impacts of their rulemakings. However, none of these statutes, like PRA 

 

21Paperwork Reduction Act of 1995, Pub. L. No. 104-13, 109 Stat. 163 (1995) (codified as 

amended at 44 U.S.C. §§ 3501-3520); Regulatory Flexibility Act, Pub. L. No. 96-354, 94 

Stat. 1164 (1980) (codified as amended at 5 U.S.C. §§ 601-612). PRA requires agencies 

to justify any collection of information from the public to minimize the paperwork burden 

the collection imposes and to maximize the practical utility of the information collected. 44 

U.S.C. § 3504. RFA requires federal agencies to (1) assess the impact of their regulation 

on small entities, including businesses, governmental jurisdictions, and certain not-forprofit organizations with characteristics set forth in the act, and (2) consider regulatory 

alternatives to lessen the regulatory burden on small entities. 5 U.S.C. § 603. 

22However, RFA requires agencies to discuss alternatives in the course of a final 

regulatory flexibility analysis. The analysis must include “a description of the steps the 

agency has taken to minimize the significant economic impact on small entities consistent 

with the stated objectives of applicable statutes, including a statement of the factual, 

policy, and legal reasons for selecting the alternative adopted in the final rule and why 

each one of the other significant alternatives to the rule considered by the agency which 

affect the impact on small entities was rejected.” 5 U.S.C. § 604(a)(6).

Regulatory Analyses in 

Federal Rulemaking
 

Page 11 GAO-14-67 Dodd-Frank Regulations

and RFA, prescribe formal, comprehensive benefit and cost analyses that 

require the identification and assessment of alternatives. Specifically,

• CFTC, under section 15(a) of the Commodity Exchange Act, is 

required to consider the benefits and costs of its action before 

promulgating a regulation under the Commodity Exchange Act or 

issuing certain orders. Section 15(a) specifies that the benefits and 

costs shall be evaluated in light of (1) protection of market participants 

and the public; (2) efficiency, competitiveness, and financial integrity 

of futures markets; (3) price discovery; (4) sound risk-management 

practices; and (5) other public interest considerations.23

• Under the Consumer Financial Protection Act (Title X of the DoddFrank Act), CFPB must consider the potential benefits and costs of its 

rules for consumers and entities that offer or provide consumer 

financial products and services, including potential reductions in 

consumer access to products or services resulting from the rules.24

CFPB also must consider the impacts on insured depository 

institutions and credit unions with $10 billion or less in assets, and the 

impacts on consumers in rural areas.25 When CFPB does not certify 

that a proposed regulation is not expected to have a significant 

economic impact on a substantial number of small entities, CFPB also 

must describe in its initial RFA analysis any projected increase in the 

cost of credit for small entities and any significant alternatives that 

would minimize such increases for small entities.26

• SEC must consider whether a rule will promote efficiency, 

competition, and capital formation whenever it is engaged in 

rulemaking and is required to consider or determine whether an action 

is necessary or appropriate in the public interest.27 SEC also must 

consider the impact that any rule promulgated under the Securities 

Exchange Act would have on competition.28

 

23§ 15(a), 42 Stat. 998 (1922) (codified as amended at 7 U.S.C. § 19(a)). 

This provision states that 

24Pub. L. No. 111-203, Tit. X, § 1022(b)(2) (codified at 12 U.S.C. § 5512(b)(2)).

25Id. 

265 U.S.C. § 603(d). 

27Pub. L. No. 104-290, § 106(a)-(c), 110 Stat. 3416, 3424 (1996) (codified as amended at 

15 U.S.C. §§ 77b(b), 78c(f), 80a-2(c)). Conforming amendments to the Investment 

Advisers Act of 1940 were made in section 224 of the Gramm Leach Bliley Act. Pub. L. 

No. 106-102, § 224, 113 Stat. 1338, 1402 (1999) (codified at 15 U.S.C. § 80b-2(c)). 

28§ 23(a)(2), 48 Stat. 881 (1934) (codified as amended at 15 U.S.C. § 78w(a)(2)). 
 

Page 12 GAO-14-67 Dodd-Frank Regulations

a rule should not be adopted if it would impose a burden on 

competition that is not necessary or appropriate to the act’s purposes.

• The Electronic Funds Transfer Act, as amended by the Dodd-Frank 

Act, requires the Federal Reserve to prepare an analysis of the 

economic impact of regulations issued by the Federal Reserve that 

considers the costs and benefits to financial institutions, consumers, 

and other users of electronic fund transfers.29

In contrast, E.O. 12,866, supplemented by Executive Order 13,563 (E.O. 

13,563), requires covered federal agencies, to the extent permitted by law 

and where applicable, to (1) assess benefits and costs of available

regulatory alternatives and (2) include both quantifiable and qualitative 

measures of benefits and costs in their analysis, recognizing that some 

benefits and costs are difficult to quantify.

The analysis must 

address the extent to which additional paperwork would be required, 

the effects upon competition in the provision of electronic banking 

services among large and small financial institutions, and the 

availability of such services to different classes of consumers, 

particularly low-income consumers.

30 According to OMB, such 

analysis can enable an agency to learn if the benefits of a rule are likely 

to justify the costs and discover which of the possible alternatives would 

yield the greatest net benefit or be the most cost-effective. In 2003, OMB 

issued Circular A-4 to provide guidance to federal executive agencies on 

the development of regulatory analysis as required by E.O. 12,866.31

 

2915 U.S.C. § 1693b(a)(2). 

The 

guidance defines good regulatory analysis as including a statement of the 

need for the proposed regulation, an assessment of alternatives, and an 

evaluation of the benefits and costs of the proposed regulation and the 

alternatives. It also standardizes the way benefits and costs of federal 

30Exec. Order No. 12,866, 58 Fed. Reg. 51,735 (Sept. 30, 1993). For significant rules, the 

order further requires agencies to prepare a detailed regulatory (or economic) analysis of 

both the benefits and costs. More recently, E.O. 13,563 supplemented E.O. 12,866, in part 

by incorporating its principles, structures, and definitions. Exec. Order No. 13,563, 76 Fed. 

Reg. 3821 (Jan. 18, 2011). E.O. 12,866 contains 12 principles of regulation that direct 

agencies to perform specific analyses to identify the problem to be addressed, assess its 

significance, assess both the benefits and costs of the intended regulation, design the 

regulation in the most cost-effective manner to achieve the regulatory objective, and base 

decisions on the best reasonably obtained information available. 

31OMB, Circular A-4: Regulatory Analysis, September 17, 2003. Circular A-4 refined 

OMB’s “best practices” guidance issued in 1996 and 2000. Executive Order 13,579 (E.O. 

13,579) encourages independent regulatory agencies to comply with E.O. 13,563. Exec. 

Order No. 13,579, 76 Fed. Reg. 41,587 (July 14, 2011).
 

Page 13 GAO-14-67 Dodd-Frank Regulations

regulatory actions should be measured and reported. Of the federal 

agencies included in our review, only FSOC and Treasury are subject to 

E.O. 12,866. As independent regulatory agencies, the federal financial 

regulators—CFPB, CFTC, FDIC, the Federal Reserve, OCC, NCUA, and 

SEC—are not subject to E.O. 12,866 and OMB’s Circular A-4. Although 

not subject to E.O. 12,866 and OMB Circular A-4, most of the federal 

financial regulators told us that they try to follow Circular A-4 in spirit. In 

our 2011 report, we found that the policies and procedures of these 

regulators did not fully reflect OMB guidance and recommended that they 

incorporate the guidance more fully in their rulemaking guidance.32 Since 

then, FDIC, OCC, and SEC revised their guidance as we recommended, 

but the other agencies have not.33

In the Federal Register releases of the 59 Dodd-Frank rules that we 

identified and reviewed, the issuing federal agencies stated that they 

conducted the regulatory analyses required by various federal statutes.34

As independent regulatory agencies, the federal financial regulators—

CFPB, CFTC, FDIC, the Federal Reserve, OCC, NCUA, and SEC—are 

not subject to executive orders that require comprehensive benefit-cost 

analysis in accordance with guidance issued by OMB. Under CRA, OMB 

is responsible for determining which rules are major but relies on agency 

analyses to help make the determination. However, our analysis showed 

that OMB and the agencies may not have applied the CRA criteria 

consistently in determining which rules are major rules.

 

32GAO-12-151. 

33In April 2013, FDIC updated a statement of policy in the development and review of its 

regulations and policies. In October 2011, OCC updated its guidance for rulemaking 

procedures. In March 2012, SEC revised its guidance for conducting economic analysis in 

SEC rulemakings. All the documents incorporate principles for economic benefit-cost 

analysis set forth in OMB Circular A-4. 

34In this report, we use the terms “rules”, “regulations”, or “rulemakings” generally to refer 

to Federal Register notices of agency action pursuant to the Dodd-Frank Act, including 

regulations, interpretive rules, general statements of policy, guidance, and rules that deal 

with agency organization, procedure, or practice. 

Agencies Conducted 

Required Regulatory 

Analyses but May Not 

Be Identifying All 

Major Rules
 

Page 14 GAO-14-67 Dodd-Frank Regulations

Of the 70 Dodd-Frank rules within our scope, 59 regulations were 

substantive—generally subject to public notice and comment under the 

Administrative Procedure Act—and required some form of regulatory 

analysis. These rules were issued individually or jointly by CFPB, CFTC, 

FDIC, the Federal Reserve, NCUA, OCC, SEC, or Treasury. (See app. II 

for a list of the regulations in our review.) In examining the regulatory 

analyses the regulators reported that they conducted for these 59 

regulations, we found the following.

• Agencies conducted the required regulatory analyses. The 

agencies conducted regulatory analyses pursuant to PRA and RFA 

for all 59 rules. In addition, agencies conducted required regulatory 

analyses pursuant to other statutes, such as the Unfunded Mandates 

Reform Act of 1995, Small Business Regulatory Enforcement 

Fairness Act of 1996, and Riegle Community Development and 

Regulatory Improvement Act of 1994. Agencies also stated that they 

considered the benefits and costs of their rules as required under their 

authorizing or other statute. Specifically, CFPB issued 15 rules for 

which it considered the potential benefits and costs for consumers 

and entities that offer or provide consumer financial products and 

services. CFTC and SEC individually or jointly issued 27 rules and 

considered their potential impact, including their benefits and costs, in 

light of each agency’s required public interest considerations. The 

Federal Reserve issued one rule and it analyzed the rule’s economic 

impact in consideration of the costs and benefits to financial 

institutions, consumers, and other users of electronic fund transfers.

• Agencies identified 10 major rules. Of the 59 rules that were issued 

and became effective from July 24, 2012, through July 22, 2013, OMB 

identified 10 as major rules under CRA. Specifically, CFPB issued two 

major rules; CFTC issued three major rules; SEC issued two major 

rules; CFTC and SEC jointly issued one major rule; the Federal 

Reserve issued one major rule; and the Federal Reserve, FDIC, and 

OCC jointly issued one major rule.

• In the 10 major rulemakings, agencies generally addressed the 

key elements in OMB’s guidance. In our analysis of the 10 DoddFrank rules identified as major we found that the agencies addressed 

many of the OMB guidance’s key elements. All of the rules identified 

the problem to be addressed. In all but two of the rule proposals, the 

agencies identified regulatory alternative approaches that they 

considered, and the agencies asked for and received public 

comments on alternatives in all of the rules. Based on public 

comments and other information, the agencies analyzed the benefits 

and costs of the rules, including regulatory alternatives. In 5 of the 10 

rules, the agencies explicitly identified the baseline against which they 

Regulators Conducted 

Required Regulatory 

Analyses for Their DoddFrank Rulemakings
 

Page 15 GAO-14-67 Dodd-Frank Regulations

assessed benefits and costs. In the other rules, the agencies implicitly 

identified the baseline, typically as pre-Dodd-Frank Act. However, as 

we found in our last review, the agencies quantified certain 

compliance costs associated with their rules, such as paperworkrelated costs, but generally did not quantify other costs.35

Furthermore, none of the agencies quantified any of the benefits, in 

part because of stated data limitations. However, all of the agencies 

discussed the benefits and costs of their rules, including alternatives, 

in qualitative terms.

Since the enactment of the Dodd-Frank Act through July 22, 2013, federal 

financial regulators and Treasury issued 36 Dodd-Frank rules that were 

classified as major under CRA. CRA, enacted in 1996, provides Congress 

with the opportunity to review and disapprove new rules issued by federal 

agencies.36 To that end, the act establishes procedures by which 

Congress may disapprove an agency’s rule by introducing a joint 

resolution of disapproval within 60 days of receiving the rule that, if 

adopted by both houses of Congress and signed by the President, can 

nullify the agency’s rule.37

Specifically, CRA requires agencies, including independent agencies, to 

submit final rules to Congress and the Comptroller General before the 

rules can become effective. Rules not classified as major go into effect as 

otherwise provided by law after submission to Congress and the 

Comptroller General, while rules classified as major take effect on the 

later of 60 days after Congress receives the rule report, or 60 days after 

the rule is published in the Federal Register, as long as Congress does 

not pass a joint resolution of disapproval. During the 60 day period, 

Congress may introduce, if desired, a resolution of disapproval prior to 

any major rule taking effect. CRA defines a major rule as any rule that the 

OMB finds has resulted in or is likely to result in (1) an annual effect on 

the economy of $100 million or more; (2) a major increase in costs or 

 

35GAO-13-101. 

36See 5 U.S.C. §§ 801-802. 

375 U.S.C. §§ 801(b), 802. Since 1996, 43 resolutions have been introduced in the Senate 

or House of Representatives and two of those resolutions have passed one house of 

Congress. Only the Department of Labor’s rule on ergonomics (65 Fed. Reg. 68,262 (Nov. 

14, 2000)) has been disapproved by both houses of Congress and signed by the 

President. See Pub. L. No. 107-5, 115 Stat. 7 (2001).

OMB Classified a Number 

of the Dodd-Frank Rules 

as Major but, along with 

Federal Financial 

Regulators, Used 

Inconsistent Processes in 

Applying CRA’s Criteria
 

Page 16 GAO-14-67 Dodd-Frank Regulations

prices for consumers; individual industries; federal, state, or local 

government agencies; or geographic regions; or (3) significant adverse 

effects on competition, employment, investment, productivity, innovation, 

or on the ability of United States-based enterprises to compete with 

foreign based enterprises in domestic and export markets. Although OMB 

determines whether a rule should be classified as major under CRA, 

OMB officials told us that they rely on agency submissions of rules and 

analyses to help make the determination.

Federal financial regulators and Treasury jointly or separately issued the 

36 rules pursuant to the Dodd-Frank Act that were found to be major 

rules. CFPB, CFTC, and SEC collectively accounted for 32 (close to 90 

percent) of the rules. (See app. III for a list of Dodd-Frank rules classified 

as major.) Based on our review of the analyses provided by the agencies 

to OMB, we found that the agencies expect that all 36 rules will or could 

meet CRA’s first major rule criterion—that is, result in an annual effect on 

the economy of $100 million or more. In addition, and although a rule 

needs to meet only one of the multiple criteria in the CRA major rule 

definition to be considered major, agencies expect that 6 of the 36 major 

rules could cause a major increase in costs or prices and 3 of the rules 

could have a significant adverse effect on competition or other activities.

The processes used by federal financial regulators and OMB to identify 

rules as major vary and create the potential for OMB to not identify all 

major rules. In 1999, OMB issued guidance on implementing CRA that 

outlined the process for identifying major rules.38

 

38OMB, Memorandum 99-13 (Mar. 30, 1999). The memorandum notes that CRA applies 

to every executive branch “agency” as defined in 5 U.S.C. § 551(1). This definition, from 

the Administrative Procedure Act, includes the independent regulatory commissions and 

boards. In some areas, the memorandum provides different guidance for rules subject to 

E.O. 12,866 and rules not subject to the order. In this report, we generally refer to 

agencies subject to E.O. 12,866 as executive branch agencies and agencies not subject 

to the order as independent regulatory agencies. 

For rules subject to E.O. 

12,866 review, the guidance instructs agencies, when submitting rules, to 

indicate whether they consider the rules major. For rules not subject to 

E.O. 12,866 review, agencies are instructed to contact their OMB desk 

officer, who has responsibility for certain agencies, in accordance with 

their established practice. Because the federal financial regulators are not 

subject to E.O. 12,866, they submit rules to OMB per practices 

established with their OMB desk officers. Another difference is that 

agencies subject to E.O. 12,866 generally would be required to prepare a 
 

Page 17 GAO-14-67 Dodd-Frank Regulations

comprehensive benefit-cost analysis, quantifying benefits and costs 

where feasible, for significant regulatory actions. OMB desk officers can 

then use such analysis in determining whether a rule is major under CRA. 

In contrast, for rules not subject to the order, the agencies would not 

necessarily be required to conduct such an analysis. As a result, OMB 

desk officers may have less complete information from which to 

determine whether a rule is major under CRA.

We found that regulators’ established practices vary. For example, some 

federal financial regulators told us that they submit all of their rules to 

OMB for review, but three regulators told us that they submit only those 

rules they consider major based on their analyses. OMB officials told us 

that their expectation is that independent agencies should send all rules 

to their desk officers; otherwise, the desk officers cannot determine 

whether the rules are major as required under CRA. The risk of OMB not 

identifying a major rule is unknown, but one federal financial regulator we 

interviewed said that the agency tries to be conservative in its analyses—

tending to overestimate rather than underestimate costs, thereby 

reducing the risk that a rule may not be identified as major. Additionally, 

OMB commonly relies on the issuing agency’s expertise and analyses to 

classify rules as major.

We also found examples that indicate that federal financial regulators and 

OMB may not be interpreting CRA’s major rule definition or related OMB 

guidance consistently.

• Applying CRA criteria to indirect consequences. Agencies differed 

in the way they treated indirect costs of their rules when considering 

whether such rules could have an impact of $100 million dollars or 

more annually on the economy. In 2012, CFTC and SEC jointly issued 

a rule to further define certain swap terms, including swap and 

security-based swap.39

 

3977 Fed. Reg. 48,208 (Aug. 13, 2012).

In its analysis, CFTC noted that the 

definitions, by themselves, would not have an annual effect on the 

economy of $100 million but will affect a number of other rules, 

including rules determined to be major rules. According to CFTC, 

these other rules could not be made effective without the final 

definitions rule; as a result, it concluded that the definitions rule would 

have an annual effect on the economy of more than $100 million. 

CFTC and SEC also jointly issued a rule to further define certain 
 

Page 18 GAO-14-67 Dodd-Frank Regulations

terms including swap dealer and security-based swap dealer.40 In its 

analysis, SEC noted that these definitions, by themselves, would not 

impose substantive requirements on dealers or major participants, but 

that the rule should be considered major because it would set 

boundaries that determine whether entities are subject to other rules, 

including ones determined to be major rules. In contrast, in 2012 

FSOC issued a final rule on the process it intends to use for 

determining whether a nonbank financial company should be 

supervised by the Federal Reserve and subject to enhanced 

prudential standards.41 Treasury officials noted that they believed the 

rule should not be considered major because the rule did not impose

substantive requirements on any entities, but only laid out the process 

by which they could become subject to other rules and regulations.42

• Applying CRA criteria to related and jointly issued rules. CFPB 

combined two separate but related rules to estimate total costs in its 

CRA major rule assessment, but in other cases, agencies issuing 

separate but related rules have not combined the rules’ costs or 

benefits. In 2013, CFPB issued two separate mortgage servicing rules 

that amended Regulation X and Regulation Z.

OMB agreed with Treasury’s assessment and determined that the rule 

was not major.

43

 

4077 Fed. Reg. 30,596 (May 23, 2012).

In its CRA analysis 

submitted to OMB, CFPB estimated that Regulations X and Z would 

have an annual burden of $22 million in paperwork-related costs, and 

Regulation X would create an additional annual burden of $90 million. 

4177 Fed. Reg. 21,637 (Apr. 11, 2012).

42Treasury officials further noted that the actual designation of a nonbank financial 

company is done on a company-by-company basis in which FSOC members analyze 

whether a particular company could pose a threat to the financial stability of the United 

States and then vote to determine whether the company shall be subject to Federal 

Reserve supervision. A proposed or final determination requires the vote of no fewer than 

two-thirds of voting FSOC members, including an affirmative vote by the FSOC 

chairperson. FSOC must provide a written notice of the proposed determination to the 

nonbank financial company, including an explanation of the basis of the proposed 

determination. The nonbank financial company may request a hearing to contest the 

proposed determination in accordance with 12 U.S.C. § 5323(e) and 12 C.F.R. §

1310.21(c).

4378 Fed. Reg. 10,696 (Feb. 14, 2013); 78 Fed. Reg. 10,902 (Feb. 14, 2013). Regulation 

X implements the Real Estate Settlement Procedures Act of 1974 and Regulation Z 

implements the Truth in Lending Act. The CFPB rules, issued concurrently, amended the 

regulations and implemented provisions of the Dodd-Frank Act regarding mortgage loan 

servicing. 
 

Page 19 GAO-14-67 Dodd-Frank Regulations

CFPB noted that combining the rules results in a total cost of around 

$112 million and, thus, concluded that the final rules, together, were 

likely to result in an annual effect on the economy of $100 million or 

more.44

• Applying OMB guidance for adding benefits and costs. OMB 

classified an SEC rule as major that combined benefits and costs to 

estimate the rule’s annual effect, which could be contrary to its related 

guidance (discussed below). In 2011, SEC issued a final rule 

implementing various amendments that the Dodd-Frank Act made to 

the Investment Advisers Act.

OMB agreed and identified both rules as major. In contrast, 

other federal financial regulators have issued related Dodd-Frank 

rules, but did not combine them in their CRA analysis. Had these 

separate but related rules been combined, they may have exceeded 

the $100 million threshold. Additionally, agencies jointly issued four 

major Dodd-Frank rules and, in each case, provided their analysis of 

the costs and benefits to OMB individually rather than cumulatively. 

OMB has not issued any guidance on the issue of whether rules 

should be considered separately or together for CRA purposes. OMB 

officials told us that they expect agencies to coordinate their CRA 

analyses on jointly issued rules but said such coordination may not 

always occur.

45

 

44CFPB officials told us that the two rules had been considered together in the rulemaking 

process and were issued on the same date, and that CFPB had combined the CRA 

analysis of the rules as a matter of efficiency. CFPB officials also told us that CFPB would 

provide OMB with separate CRA estimates for each individual rule in the future.

In its analysis, SEC noted that it is not 

able to quantify some of the costs associated with the rule, but the 

costs it was able to estimate totaled about $55.9 million for the first 

year. SEC further noted that it was unable to quantify the benefits of 

the new rules but believes they will be substantial and, together with 

costs, will result in an annual effect on the economy of more than 

$100 million. In its February 2011 guidance on E.O. 12,866 regarding 

economically significant regulatory actions (which does not apply to 

independent regulatory agencies), OMB noted that under the 

executive order, agencies must submit a regulatory impact analysis 

for economically significant regulatory actions, defined (1) to have an 

annual effect on the economy of $100 million or more or (2) to 

adversely affect in a material way the economy; productivity; 

competition; jobs; the environment; public health or safety; or state, 

4576 Fed. Reg. 42,950 (July 19, 2011).
 

Page 20 GAO-14-67 Dodd-Frank Regulations

local, or tribal governments or communities.46

Although OMB issued a memorandum in 1999 to instruct agencies on 

how to implement CRA, the memorandum provided little guidance on how 

agencies should apply CRA’s major rule criteria—particularly its $100 

million threshold. However, as illustrated by our examples, the criteria can 

be applied in different ways. The only related OMB guidance on applying 

CRA’s $100 million threshold was included in the February 2011 

guidance that provided answers to frequently asked questions about the 

regulatory impact analysis required by E.O. 12,866 and OMB Circular A4, to which independent regulatory agencies are not subject. According to 

OMB staff, the guidance was not offered to independent agencies as 

additional guidance to implement CRA. Without specific guidance 

addressed to agencies that must comply with CRA on how to apply 

CRA’s $100 million threshold, federal financial regulators may continue to 

inconsistently apply CRA’s major rule criteria and thus, inconsistently 

advise OMB on whether to classify rules as major. To the extent that any 

major rules are not being classified as such, those rules may become 

effective before the end of the 60-day congressional review period

required under CRA. On the other hand, our third example also shows 

that some rules may be potentially misclassified as major and may not be 

made effective for 60 days after their submission to Congress or

publication in the Federal Register when such a delay is not required.

The guidance notes 

that the $100 million threshold includes benefits, costs, or transfers, 

and is identical to the threshold for determining whether a rule is 

major under CRA. The guidance highlighted the word “or” to indicate 

that benefits and costs should not be combined.

Federal agencies coordinated on 49 of the 70 Dodd-Frank regulations 

that we reviewed, as required by the act or voluntarily. The act also 

requires CFPB to coordinate with federal and state regulators in its 

supervision of certain banks and nonbanks that offer or provide consumer 

financial products or services. To date, CFPB has established a 

framework to coordinate with prudential regulators and is establishing a 

similar framework to coordinate with state regulators.

 

46OMB, Regulatory Impact Analysis: Frequently Asked Questions (FAQ), accessed on 

Nov. 13, 2013, http://www.whitehouse.gov/omb/inforeg_regpol_agency_review. 

Regulators Continue 

to Coordinate on 

Rulemakings 
 

Page 21 GAO-14-67 Dodd-Frank Regulations

Generally, federal financial regulators recognize the importance of 

interagency coordination during the rulemaking process. Coordination 

during the rulemaking process occurs when two or more regulators jointly 

engage in activities for a purpose such as reducing duplication and 

overlap in regulations. Effective coordination can help regulators minimize 

or eliminate staff and industry burden, administrative costs, conflicting 

regulations, unintended consequences, and uncertainty among 

consumers and markets. As we reported last year, agency staffs told us 

that most interagency coordination during rulemaking largely was informal 

and conducted at the staff level.47

Recognizing the importance of coordination, the Dodd-Frank Act imposes 

interagency coordination or consultation requirements and responsibilities 

on regulators or in connection with certain rules. Dodd-Frank coordination 

requirements include topic-specific, agency-specific, and rule-specific 

requirements. For example:

For example, regulators held some 

formal interagency meetings early on in the Dodd-Frank rulemaking 

process, but subsequent coordination on specific rulemakings was mostly 

informal and conducted through e-mail, telephone conversations, and 

one-on-one conversations between staff, including several interagency 

meetings and teleconferences.

• Under Title VII, SEC and CFTC must coordinate and consult with 

each other and prudential regulators, to the extent possible, before 

starting a rulemaking or issuing an order on swaps or swap-related 

subjects. This requirement’s purpose is to assure regulatory 

consistency and comparability across the rules or orders. Title VII also 

directs CFTC, SEC, and the prudential regulators to coordinate with 

foreign regulators, as appropriate, in implementing swap reform 

regulations.

• Under Title X of the act, CFPB is required to consult with the 

appropriate prudential regulators or other federal agencies, both 

before proposing a rule and during the comment process, on 

consistency with prudential, market, or systemic objectives 

administered by such agencies.

• Section 165(i) requires certain financial institutions to conduct annual 

or semi-annual stress tests and directs regulators to issue consistent 

and comparable regulations implementing the stress test requirement 

 

47GAO-13-101. 

Federal Financial 

Regulators Have 

Continued to Coordinate 

on Their Dodd-Frank 

Rulemakings
 

Page 22 GAO-14-67 Dodd-Frank Regulations

in coordination with the Federal Reserve and Federal Insurance 

Office.

• Section 201(b) provides that, for the purpose of defining “financial 

company,” no company shall be deemed to be predominantly 

engaged in activities that the Federal Reserve has determined are 

financial in nature or incidental to such financial activities, if the 

consolidated revenues of that company from such activities constitute 

less than 85 percentage of the total consolidated revenues of that 

company, as FDIC, in consultation with Treasury, shall establish by 

regulation.

We found evidence of coordination between the rulemaking agency and 

other regulators for 49 of the 70 regulations that we reviewed (see app. 

IV). We found the act required coordination, or it was unclear whether the 

act required coordination, in 39 of these 49 rulemakings.48

• Twelve rules issued by CFTC and SEC implemented provisions in 

Title VII related to swaps and, thus, required coordination with each 

other and the prudential regulators to the extent possible.

We reviewed 

the rulemakings to document evidence of coordination among the 

agencies and also interviewed agency staff about their coordination 

efforts for the 39 rules. We found the following:

49

• CFPB indicated that it coordinated with prudential or other federal 

regulators, pursuant to Title X of the act, on 17 of its rulemakings 

under federal consumer financial laws.

For 

example, CFTC specified that it coordinated with SEC on nine of the 

swap-related rules issued solely by CFTC, and with the prudential 

regulators, among others, on five of these nine rules.

50

 

48In five of its final rules, CFPB noted in the Federal Register releases that although it was 

unclear about the applicability of the Dodd-Frank coordination requirement to the rules, 

the agency consulted or coordinated with other regulators as the act would require if 

applicable. When we refer to the 39 rules where coordination was required, we include 

these 5 CFPB rules. 

CFPB noted that it consulted

or offered to consult with the prudential regulators on all 17 rules and 

49CFTC and SEC subject to requirements in the Dodd-Frank Act to issue certain rules 

jointly. For this review period, CFTC issued 18 rules, SEC issued 9 rules, and they jointly 

issued 2 rules. The agencies were not required to coordinate under Title VII for all of the 

rules because, for example, the rules were not related to swaps.

50CFPB issued 19 rules during this review period, including 2 joint rules with the Federal 

Reserve. CFPB coordinated on 17 rules; the other 2 rules were a technical amendment 

and guidance to which CFPB found the coordination requirement did not apply. 
 

Page 23 GAO-14-67 Dodd-Frank Regulations

the Federal Trade Commission, the Department of Housing and 

Urban Development, or other agencies on many of its rules.

• For the other 10 rules where coordination was mandated, we found 

that CFTC, FDIC, the Federal Reserve, OCC, or SEC coordinated in 

response to rule-specific interagency coordination requirements in the 

act.

For 10 of the 49 rules, there was no Dodd-Frank requirement to 

coordinate, but we found evidence that the agencies voluntarily 

coordinated on the rulemakings. Most federal financial regulatory officials 

told us that they generally voluntarily engage in interagency coordination 

when their rules affect another agency or its supervised entities or when 

another agency has expertise that can inform their rulemakings.51

We also found evidence of international coordination on six swap-related 

rules in our scope.52

 

51We did not find evidence of interagency coordination for 21 of the rules we reviewed. 

The regulatory agencies were not required to coordinate or did not coordinate, as they 

determined based on their discretion, on these rules. Agency officials said that some rules 

were technical in nature and no coordination was needed. For example, officials said 

some rules were adjustments to existing rules to make them compatible with newly issued 

rules under the Dodd-Frank Act. Additionally, officials said that some rules were internal 

and, thus, the agency did not coordinate with other agencies. Examples include rules 

establishing disclosure requirements or improving recordkeeping standards for supervised 

entities. We did not evaluate the agencies’ rationale for not voluntarily coordinating. 

CFTC issued the six rules and noted that it 

coordinated with international bodies, such as the European Securities 

Markets Authority, European Central Bank, and regulators in the United 

Kingdom, Japan, Hong Kong, Singapore, Sweden, and Canada (see app. 

IV). CFTC and SEC staffs said that while they may coordinate with 

international bodies on specific rules, they also are active participants in 

various international bodies, such as those engaged in global derivatives 

reforms. For example, CFTC and SEC are members of the International 

Organization of Securities Commissions’ Over-the-Counter (OTC) 

Derivatives Regulation Task Force, Financial Stability Board’s OTC 

Derivatives Working Group, and OTC Derivatives Regulators’ Forum. 

These groups all work, in part, to share information or encourage 

52Not all rules issued by CFTC or SEC required international coordination under Title VII 

of the Dodd-Frank Act. Some of the rules were not related to swaps. For other rules, the 

agency issuing the rule determined that international coordination was not necessary. For 

example, officials stated or the rules explained that the agencies did not engage in 

coordination with foreign regulators because their rules were consistent with rules 

promulgated by foreign regulators, recommendations issued by international entities, or 

international standards. 
 

Page 24 GAO-14-67 Dodd-Frank Regulations

communication and promote consistency in OTC derivatives reforms.53

CFTC and SEC also have developed supervisory cooperation 

arrangements or memoranda of understanding (MOU) with foreign 

authorities in major jurisdictions where regulated entities are located.54

In our November 2011 report, we recommended that FSOC work with the 

federal financial regulators to establish formal coordination policies for 

rulemaking that clarify issues, such as when coordination should occur, 

the process that will be used to solicit and address comments, and what 

role FSOC should play in facilitating coordination.

According to CFTC staff, these coordination efforts may inform CFTC’s 

rulemaking.

55

 

53The International Organization of Securities Commissions’ OTC Derivatives Regulation 

Task Force coordinates securities and futures regulators’ efforts in the supervision and 

oversight of OTC derivatives markets. The Financial Stability Board’s OTC Derivatives 

Working Group monitors global implementation of OTC derivatives reforms agreed upon 

by the G20 members. The OTC Derivatives Regulators’ Forum is comprised of 

international financial regulators that have direct authority over OTC derivatives markets. 

This group meets periodically to exchange views and share information on developments 

related to OTC derivatives markets. GAO will be issuing a report on international 

regulatory reforms that will discuss U.S. regulators’ participation in international swap 

reform efforts. 

While FSOC has a 

coordination framework, we found at that time that the framework did not 

provide, nor according to FSOC staff was it intended to provide, any 

specifics about staff responsibilities or processes to facilitate coordination. 

To date, FSOC has not implemented this recommendation. According to 

FSOC staff, the agency has written protocols for coordinating on rules for 

which coordination is required under the Dodd-Frank Act. For these and 

other Dodd-Frank rules, FSOC’s Deputies Committee, composed of 

senior representatives of its members, and six functional committees, 

54According to CFTC staff, CFTC cooperates with foreign regulatory authorities on a 

routine basis, both informally and through MOUs and other arrangements. For a list of 

these agreements, see 

http://www.cftc.gov/international/memorandaofunderstanding/index.htm. CFTC staff told 

us that as CFTC issues new regulations related to OTC derivatives reform, staff have 

developed supervisory cooperation arrangements with foreign authorities in major 

jurisdictions where regulated entities are located. Staff currently are negotiating 

arrangements with the European Securities and Markets Authority and authorities in the 

United Kingdom, Germany, Canada, Australia, Singapore, and Japan, and expect to 

negotiate arrangements with authorities in other jurisdictions. SEC staff said that SEC has 

signed MOUs with foreign jurisdictions, including European Securities and Markets 

Authority and authorities in the United Kingdom, Germany, China, and Turkey. 

55GAO-12-151. 
 

Page 25 GAO-14-67 Dodd-Frank Regulations

provide a forum in which agencies can coordinate or consult with each 

other. The Deputies Committee meets every two weeks to discuss 

FSOC’s agenda and coordinate and oversee the work of the six functional 

committees. However, as we previously reported, a number of industry 

representatives believe FSOC could play a greater role in coordinating 

member agencies’ rulemaking efforts.56 We further noted that the FSOC 

chairperson, in consultation with the other FSOC members, is required to 

regularly consult with the financial regulatory entities and other 

appropriate organizations of foreign governments or international 

organizations on matters relating to systemic risk to the international 

financial system. At a March 2013 congressional hearing, an FSOC 

official testified that Congress did not provide FSOC or its chairperson 

with authority to require its member agencies to coordinate in all cases, 

nor did the Dodd-Frank Act change the statutory independence of 

FSOC’s member agencies.57 He noted that FSOC, nevertheless, will 

continue to seek to identify ways to further enhance collaboration through 

FSOC’s committees and working groups. We continue to maintain that 

FSOC, working together with member agencies, should develop formal 

coordination policies, which could lead to improved coordination of 

rulemakings.

 

56GAO-12-151. 

57Who Is Too Big to Fail? GAO’s Assessment of the Financial Stability Oversight Council 

and the Office of Financial Research: Hearing before the Subcomm. On Oversight and 

Investigations of the H. Comm. on Financial Services. 113th Cong. 4 (2013) (statement of 

Amias M. Gerety, Deputy Assistant Secretary, Financial Stability Oversight Council, U.S. 

Department of the Treasury). 
 

Page 26 GAO-14-67 Dodd-Frank Regulations

Under the Dodd-Frank Act, CFPB is authorized to supervise insured 

depository institutions and credit unions with more than $10 billion in 

assets (large banks) and their affiliates, and nonbank financial service 

providers (nonbanks).58

While CFPB oversees large banks—that is, insured depository institutions 

and credit unions with more than $10 billion in assets—and their affiliates 

for compliance with federal consumer financial laws, prudential regulators 

also oversee the same entities for safety and soundness purposes and 

compliance with other laws and regulations. CFPB began operating its 

large bank supervision program in July 2011 and examining banks shortly 

thereafter. As of March 31, 2013, CFPB supervised 112 large banks and 

The statutory requirements for CFPB supervision 

of large banks and nonbanks largely are the same and include (1) 

examining such entities to assess, among other things, their compliance 

with federal consumer financial laws, (2) coordinating with other federal 

and state regulators, and (3) using, where possible, publicly available 

information and existing reports from federal or state regulators pertaining 

to supervised entities. CFPB launched its large bank and nonbank 

supervision programs in July 2011 and January 2012, respectively. CFPB 

has established a framework to comply with Dodd-Frank’s requirements 

to coordinate supervision with prudential regulators and is establishing a 

similar framework to comply with the act’s coordination requirements with 

state regulators.

 

58See sections 1024 and 1025 of the act for CFPB’s authority to supervise nonbanks and 

large banks, respectively. Pub. L. No. 111-203, §§ 1024, 1025 (codified at 12 U.S.C. §§ 

5514, 5515). Under section 1025 of the Dodd-Frank Act, CFPB has exclusive examination 

authority and primary enforcement authority with respect to a bank or credit union with 

total assets of more than $10 billion and its affiliates and service providers for purposes of 

assessing compliance with federal consumer financial laws and related purposes. 12 

U.S.C. § 5515. Section 1026 provides that the prudential regulators will retain supervisory 

and enforcement authority with respect to other banks for these purposes. 12 U.S.C. § 

5516. Section 1024 authorizes CFPB to supervise certain nondepository entities and 

individuals who offer or provide mortgage-related products or services, payday loans, 

private student loans, and larger participants of other consumer financial service or 

product markets as CFPB defines by rule, among others, plus their service providers. 12 

U.S.C. § 5514. Under section 1026, CFPB may include its examiners on a sampling basis 

at the appropriate prudential regulator’s examinations of smaller banks to assess 

compliance with the requirements of federal consumer financial law. 12 U.S.C. § 

5516(c)(1). Additionally, under section 1026, CFPB has supervisory authority over a 

service provider to a substantial number of smaller banks. 12 U.S.C. § 5516(e). Under 

section 1029, CFPB may not exercise any authority over certain dealers, subject to 

exception, that are predominantly engaged in the servicing and sale or leasing of motor 

vehicles. 12 U.S.C. § 5519(a).

CFPB Has a Framework to 

Coordinate with Prudential 

Regulators and Is 

Establishing One with 

State Regulators

CFPB Has Established a 

Framework to Coordinate with 

Prudential Regulators
 

Page 27 GAO-14-67 Dodd-Frank Regulations

37 affiliated banks.59

The Dodd-Frank Act requires CFPB and prudential regulators to 

coordinate their supervision of large banks and their affiliates to minimize 

regulatory burden. Specifically, CFPB and prudential regulators must (1) 

coordinate the scheduling of examinations of large banks and their 

affiliates; (2) conduct simultaneous examinations of large banks and their 

affiliates, unless otherwise requested by the institution; (3) share draft 

reports of such examinations with each other and provide the other 

regulator with at least 30 days to comment on the draft report before 

finalizing it; and (4) take into consideration any concerns raised by the 

other regulator before issuing the final examination report.

OCC is the prudential regulator for 61 of the large 

banks, and FDIC, the Federal Reserve, and NCUA are the prudential 

regulators for 26, 21, and 4 of the other large banks, respectively.

60 Additionally, 

the act states that CFPB shall, to the fullest extent possible, use existing 

reports of supervised entities that have been provided to a federal or state 

regulator and information that has been reported publicly, and coordinate 

requirements regarding reports to be submitted by supervised entities.61

To meet the statutory requirements for coordination, CFPB has 

developed a framework to coordinate its supervisory activities with the 

prudential regulators. The framework consists primarily of (1) an MOU 

between CFPB and the prudential regulators and (2) CFPB’s examination 

 

59In November 2011, CFPB and the prudential regulators issued an interagency statement 

explaining that the agencies will use bank Call Reports to determine a bank’s asset size 

for determining which regulator supervises the bank for compliance with federal consumer 

financial laws. The agencies initially will look to June 30, 2011, Call Report data to 

determine a bank’s asset size. Thereafter, CFPB will become a bank’s federal consumer 

protection law regulator once the bank has reported total assets of greater than $10 billion 

for four consecutive quarters, and, similarly, a bank will not cease to be regulated by 

CFPB for such purposes unless it has reported total assets of $10 billion or less for four 

consecutive quarters.

6012 U.S.C. § 5515(b)(2), (e)(1).

6112 U.S.C. § 5515(b)(2), (3).
 

Page 28 GAO-14-67 Dodd-Frank Regulations

tools, which may be used to help ensure the required coordination is 

conducted, documented, and reviewed.62

MOU for Coordinating. In May 2012, CFPB and the prudential regulators 

entered into an MOU to facilitate their compliance with Dodd-Frank’s 

coordination requirements.63

• establishes guidelines for coordinating examinations, in part by having 

each regulator designate a point of contact for each bank and 

affiliates, and directing the points of contact to consult with each other 

on the scheduling of examinations and to reach agreement on a 

timetable for sharing scheduling information, such as the scope, 

estimated start date and duration, and estimated staffing of the 

examination;

The MOU includes sections that define key 

terms, establish guidelines for simultaneous and coordinated 

examinations, and set forth agreements and expectations for sharing 

information. In light of the act’s coordination requirements, the MOU

• documents that the regulators generally will conduct their 

examinations of large banks and their bank affiliates in a simultaneous 

manner and defines the term “simultaneous examination;”64

• documents that CFPB and the relevant prudential regulator will 

provide the receiving agency at least 30 days to comment on a draft 

report and will consider any comments provided before finalizing the 

report; and

• documents that CFPB and the prudential regulators will share material 

supervisory information, including final supervisory letters or actions; 

final examination reports, including those related to safety and 

soundness or financial condition; and other material supervisory 

 

62CFPB also is a member of the Federal Financial Institutions Examination Council, a 

formal interagency body empowered to prescribe uniform principles, standards, and report 

forms for the federal examination of financial institutions. As such, CFPB officials told us 

that CFPB coordinates its examination procedures with those used by the prudential 

regulators.

63CFPB, Memorandum of Understanding on Supervisory Coordination, accessed on 

November 13, 2013, 

http://www.consumerfinance.gov/f/201206_CFPB_MOU_Supervisory_Coordination.pdf. 

64Under the MOU, a simultaneous examination generally is one where material portions of 

the examinations by the prudential regulator and CFPB are conducted during a concurrent 

time period and may be carried out either on-site or off-site by either regulator. However, 

the examinations are not required to be carried out jointly. 
 

Page 29 GAO-14-67 Dodd-Frank Regulations

information that the CFPB and the prudential regulators agree to 

share.65

According to officials from CFPB and prudential regulators, the MOU 

serves as a roadmap to guide supervisory coordination, but its 

implementation is a work in progress. Included in the MOU is a provision 

under which the agencies agree to review the MOU’s operation after the 

first year of its execution and to consider revisions needed to better 

accomplish the MOU’s objectives. Officials told us that the review 

currently is underway and may become an annual undertaking.

Examination Coordination Tools. CBPB’s Supervision and Examination 

Manual informs examiners about coordination requirements throughout 

the four phases of CFPB’s examination cycle.66

 

65To facilitate information sharing among regulators, section 1022(c)(6) of the act gives 

CFPB, upon providing reasonable assurances of confidentiality, access to any report of 

examination or financial condition made by a prudential regulator or other federal agency 

having jurisdiction over a supervised entity or service provider, and provides that 

prudential regulators may, in their discretion, furnish to CFPB any other report or other 

confidential supervisory information on those entities. 12 U.S.C. § 5512(c)(6)(B). The 

prudential regulators are accorded the same access to CFPB reports and confidential 

supervisory information. 12 U.S.C. § 5512(c)(6)(C). To this end, CFPB also has signed 

information-sharing MOUs with each of the prudential regulators that provide the 

regulators with reasonable assurances that supervisory information will be treated in a 

confidential manner.

For the monitoring phase, 

where examiners maintain reasonably current information about a bank’s 

activities and risks to consumers or markets, the manual instructs 

examiners to review supervisory and public information about the bank, 

including prudential and state regulators’ examination reports, and to 

contact the bank’s prudential regulator to discuss any new issues raised 

by the information. For the pre-examination planning phase, where the 

examiner-in-charge collects information necessary to determine the 

examination’s scope, resource needs, and work plan, the manual directs 

the examiner-in-charge to review and update the monitoring information 

and request other relevant information from prudential and state 

regulators. In this phase, the examiner-in-charge prepares an information 

request for the supervised entity with a tailored list of information to be 

provided to examiners at the examination. In preparing this list, the 

66CFPB, CFPB Supervision and Examination Manual, version 2, October 2012. The 

examination cycle for nonbanks is largely similar to that of large banks, except for the 

monitoring phase. CFPB continuously monitors each large bank and its affiliates under its 

jurisdiction. In contrast, CFPB does not continuously monitor nonbanks but instead uses a 

risk-based analysis to determine which nonbank entities to examine.
 

Page 30 GAO-14-67 Dodd-Frank Regulations

manual directs examiners to coordinate the request with prudential and 

state regulators and keep them abreast of monitoring efforts, 

correspondence with the supervised entity, and schedule planning. For 

the examination phase, the manual instructs examiners to communicate 

regularly with the bank’s prudential regulator. Lastly, in closing an 

examination, the manual instructs the examiner-in-charge to share the 

examination draft report with the prudential regulator, provide it with no 

less than 30 days for review and comment, and consider any concerns 

before issuing a final examination report.

CFPB also has created electronic forms that examiners use to facilitate 

and document their compliance with the coordination requirements. For 

example, in the monitoring phase, examiners must complete or update a 

form to document information about CFPB’s coordination with the 

prudential or state regulators, including examination schedules. For the 

planning stage, CFPB has created an information request form that 

includes standardized text to inform the supervised entity that it generally 

need not provide documents to CFPB that it has provided to prudential 

regulators. According to CFPB officials, examiners also are instructed to 

provide the prudential regulator a copy of the information request. In 

closing the examination, CFPB has a form for preparing the examination 

letter sent to the supervised entity summarizing the examination findings. 

The form includes a field for carbon copying the letter to the prudential or 

state regulator.

The electronic storage of examination workpapers in CFPB’s Supervision 

and Examination System facilitates supervisory review for compliance 

with, among other things, coordination requirements.67 All examination 

workpapers and related documentation (including reports and other 

information collected from prudential regulators) must be maintained in 

electronic form and uploaded to the system.68

 

67The Supervision and Examination System is an internal CFPB system that is used to 

document the supervision process. The system facilitates the creation of schedules, 

capture of examination information, documentation of the examination process, storage of 

documents, and ability to run monitoring reports. 

As such, the system 

68According to CFPB’s manual, during an examination, examiners collect and review 

information from the supervised entity to reach conclusions about its practices, its 

compliance management, and its compliance with specific laws and regulations. The 

records documenting the review are called workpapers. Workpapers should contain 

sufficient information and supporting documents to explain the basis for the examination 

conclusions.
 

Page 31 GAO-14-67 Dodd-Frank Regulations

includes records of examination schedules, dates on which examination 

report drafts were sent to prudential regulators, and comments received 

from the prudential regulators.69

Although CFPB has developed these tools to help coordinate 

examinations with prudential regulators, some members of Congress 

have raised concerns about CFPB’s information collection activities or 

practices and the potential for overlap between CFPB’s information 

collection efforts and other regulators’ efforts. We have ongoing work 

examining these and related issues for several members of Congress.

Examiners-in-charge and, in turn, 

management, are required to review and sign off on the adequacy of the 

workpapers. Such reviews provide a mechanism to help ensure that 

CFPB is complying with its statutory coordination requirements as 

delineated in the MOU. In addition, CFPB’s manual notes that 

examination workpapers will be reviewed through an internal quality 

control process.

State-chartered banks are subject to the supervision of their state banking 

regulators. Thus, certain large banks and their affiliates may be 

supervised by CFPB, a prudential regulator, and a state regulator. In 

addition, CFPB may share supervisory jurisdiction over certain nonbank 

entities in the mortgage origination and servicing, private education loan, 

payday loan, consumer reporting, and debt collection markets with state 

regulators overseeing these markets.70

 

69While prudential regulators do not have access to the Supervision and Examination 

System, CFPB may share information in the system with other regulators to fulfill its 

coordination requirements under the act. As mentioned earlier, CFPB and prudential 

regulators have entered into information-sharing MOUs that provide the regulators with 

reasonable assurances that supervisory information will be treated in a confidential 

manner. CFPB staff stated that CFPB shares information with regulators through secure 

channels, such as online portals or through encrypted email.

CFPB started examining 

mortgage lenders, brokers, and servicers and payday lenders in the first 

70CFPB has the authority to supervise certain nonbanks in the residential mortgage, 

private education lending, and payday lending markets. CFPB also has the authority to 

supervise nonbank ‘‘larger participants’’ of markets for other consumer financial products 

or services, as CFPB defines by rule. 12 U.S.C. § 5514(a)(1). In July 2012 and October 

2012, CFPB published final rules defining larger participants of a market for consumer 

reporting and debt collection markets, respectively. 77 Fed. Reg. 42,874 (July 20, 2012); 

77 Fed. Reg. 65,775 (Oct. 31, 2012). CFPB issued a final rule defining larger participants 

in the student loan servicing market on December 3, 2013 (not yet published in the 

Federal Register). 

CFPB Is Establishing a 

Framework to Coordinate Its 

Supervisory Activities with 

State Regulators 
 

Page 32 GAO-14-67 Dodd-Frank Regulations

half of 2012. Since that time, it has also begun examining nonbanks in the 

consumer reporting and debt collection markets. 

The Dodd-Frank Act requires CFPB and state regulators to coordinate 

their supervision of large banks and nonbanks to minimize regulatory 

burden.71 The act states that CFPB shall coordinate supervisory activities, 

including examinations and requirements regarding information requests, 

with state regulators.72 As mentioned earlier, the act also states that 

CFPB shall, to the fullest extent possible, use existing reports of 

supervised entities that have been provided to federal or state regulators 

and information that has been reported publicly.73 In supervising 

nonbanks, CFPB must consult with state regulators on requirements or 

systems, including coordinated or combined systems for registration, 

where appropriate.74

CFPB has entered into agreements with state regulators to address 

coordination requirements for supervising nonbanks and is beginning to 

implement those agreements. CFPB established an information-sharing 

MOU with the Conference of State Bank Supervisors (CSBS) and state 

regulators in January 2011; according to CFPB officials, over 60 state 

regulators have signed this or similar MOUs with CFPB.75

 

71See 12 U.S.C. §§ 5514(b)(3), 5515(b)(2).

The MOUs 

memorialize agreements on how to handle and protect any information 

that is shared, minimize burden on supervised entities, and promote 

consistent examination standards, primarily through the development of a 

72See 12 U.S.C. §§ 5514(b)(3), 5515(b)(2), (e)(2). 

73See 12 U.S.C. §§ 5514(b)(4), 5515(b)(3). As with prudential regulators, to facilitate 

information sharing among regulators, section 1022(c)(6)(C) of the act gives regulators 

having jurisdiction over a covered person or service provider, including state regulators, 

access to any report of examination made by CFPB with respect to that supervised entity 

or service provider, upon providing reasonable assurances of confidentiality.

74See 12 U.S.C. §§ 5512(c)(7)(C), 5514(b)(7)(D).

75CSBS is the nationwide organization of banking regulators from all 50 states, the District 

of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands. Besides the MOU, on 

December 6, 2012, CFPB also issued a Statement of Intent for Sharing Information with 

state banking and financial services regulators that spells out specific items that CFPB 

intends to share with state regulators, including examination schedules, examination 

reports, consumer complaint information, among others.
 

Page 33 GAO-14-67 Dodd-Frank Regulations

framework for coordinating supervisory activities.76 In May 2013, CFPB 

and CSBS, on behalf of the state regulators, agreed on a supervisory 

coordination framework. As part of the framework, CFPB and CSBS 

agreed to establish a State Coordinating Committee that would be in 

charge of coordinating with CFPB on nonbank supervision.77

CFPB has not yet undertaken rulemakings to require nonbanks to register 

and, thus, has not formally begun efforts to coordinate registration 

systems with state regulators. According to its website, the Nationwide 

Mortgage Licensing System, owned and maintained by the State 

Regulatory Registry, LLC, a wholly-owned subsidiary of CSBS, is the sole 

system for licensing mortgage companies for 54 state agencies and the 

sole system for licensing mortgage loan originators for 58 state and 

territorial agencies.

CFPB 

officials told us that CFPB and state regulators are implementing the 

framework but much work remains. 

78

 

76Specifically, in the January 2011 MOU, CFPB and CSBS agreed to consult on the 

practices used by the state regulators in examining providers of consumer financial 

products and services. CSBS agreed to provide CFPB with information furnished to it by 

state regulators and other relevant multistate bodies on examination processes, including 

examination manuals, standardized information requests, and examination procedures. 

Additionally, CFPB, CSBS, and state regulators agreed to consult on and jointly develop 

training programs for examiners.

In February 2012, CSBS stated that it intends to 

expand the system to other markets and, in April 2012, announced that 

five state banking agencies were expanding their use of the system to 

77Under the framework, CFPB, state banking regulators, and the State Coordinating 

Committee are to establish a point of contact for each supervised entity, share 

examination schedules annually and review them at least quarterly, and have a joint 

examiner-in-charge, if appropriate. In addition, points of contact are instructed to develop 

and update a supervision plan for each supervised entity tailored to the entity’s 

organizational structure and risk profile. Lastly, the framework directs CFPB and the State 

Coordinating Committee to compile annual lists of all covered nonbank entities and 

nonbank entities subject to examination.

78The Nationwide Mortgage Licensing System is a web-based system that allows state 

licensed mortgage lenders, mortgage brokers, and loan officers to apply for, amend, 

update, or renew a license online for all participating state agencies using a single set of 

uniform applications. Mortgage loan originators are required by the SAFE Mortgage 

Licensing Act of 2008 to be state licensed or registered through the Nationwide Mortgage 

Licensing System. Pub. L. No. 110-289, Div. A, Tit. V, § 1504(a), 122 Stat. 2810 (2008) 

(codified at 12 U.S.C. § 5103(a)). 
 

Page 34 GAO-14-67 Dodd-Frank Regulations

license and supervise nonbanks beyond the mortgage industry.79 CFPB 

officials told us that the agency has not yet determined when it will issue 

rulemakings on registration of nonbanks. They said they have engaged in 

discussions with CSBS to determine whether and how CFPB should 

leverage that system for registering nonbanks but no determinations have 

been made.

Federal financial regulators are continuing to implement reforms pursuant 

to the Dodd-Frank Act, but the full impact of the act remains uncertain. 

This uncertainty stems from a number of factors. In particular, the 

implementation of the reforms is being driven largely by rulemakings or 

other regulatory actions, but not all rules are finalized and effective. In 

addition, even when the act’s reforms are fully implemented, it will take 

time for the financial services industry to comply with the array of new 

regulations—meaning additional time will need to elapse to measure the 

impact of the rules. Moreover, the evolving nature of implementation 

makes isolating the Dodd-Frank Act’s effect on the U.S. financial 

marketplace difficult. This task is confounded by the many factors that 

can affect the financial marketplace, including factors that could have an 

even greater impact than the act.

Recognizing these limitations and difficulties, we developed a 

multipronged approach to analyze current data and trends that might be 

indicative of some of the Dodd-Frank Act’s initial impacts, as institutions 

react to issued and expected rules. First, we updated the indicators that 

we developed in our December 2012 report to monitor changes in certain 

characteristics of SIFIs, which are subject to enhanced prudential 

standards and oversight under the act.80

 

79With the implementation of updated uniform Nationwide Mortgage Licensing System 

licensing forms, state regulatory agencies in Massachusetts, Oklahoma, Rhode Island, 

Vermont, and Washington are managing license authorities covering a range of industries, 

including money transmitters, debt collectors, and sales finance companies. 

Although the indicators may be 

80See GAO-13-101. The Dodd-Frank Act does not use the term “systemically important 

financial institution” (SIFI). This term is commonly used by academics and other experts to 

refer to bank holding companies with $50 billion or more in total consolidated assets and 

nonbank financial companies designated by the Financial Stability Oversight Council for 

Federal Reserve supervision and enhanced prudential standards under the Dodd-Frank 

Act. For purposes of this report, we refer to these bank and nonbank financial companies 

as bank systemically important financial institutions (bank SIFI) and nonbank systemically 

important financial institutions (nonbank SIFI), respectively. We also refer to nonbank 

SIFIs and bank SIFIs collectively as SIFIs when appropriate.

Impacts of the DoddFrank Act Are 

Uncertain, and 

Regulators Are 

Developing Plans to 

Review Rules 

Retrospectively 
 

Page 35 GAO-14-67 Dodd-Frank Regulations

suggestive of the act’s impact, they do not identify causal links between 

their changes and the act. Further, many other factors can affect SIFIs 

and, thus, the indicators. Second, we also updated our difference-indifference analysis to infer the act’s impact on the provision of credit by 

and the safety and soundness of bank SIFIs. The analysis is subject to 

limitations, in part because factors other than the act could be affecting 

these entities. Third, we developed indicators to monitor the extent to 

which certain of the Dodd-Frank Act’s swap reforms are consistent with 

the act’s goals of reducing risk. Like our SIFI indicators, our swap 

indicators have limitations. For example, they do not identify causal links 

between changes in swap markets and the act or its regulations. Finally, 

we assessed agencies’ plans to conduct retrospective reviews of their 

existing rules.

According to its legislative history, the Dodd-Frank Act contains 

provisions intended to reduce the risk of failure of a large, complex 

financial institution and the damage that such a failure could do to the 

economy.81 Such provisions include (1) authorizing FSOC to designate a 

nonbank financial company for Federal Reserve supervision if FSOC 

determines it could pose a threat to U.S. financial stability and (2) 

directing the Federal Reserve to impose enhanced prudential standards 

and oversight on bank holding companies with $50 billion or more in total 

consolidated assets (referred to as bank SIFIs in this report) and nonbank 

financial companies designated by FSOC (referred to as nonbank SIFIs in 

this report). Federal agencies and regulators have been working to 

implement these provisions. For example, in January and December 

2012, the Federal Reserve proposed its enhanced prudential standards 

rules for certain U.S. and foreign companies operating in the United 

States, respectively, and has finalized rules implementing some of these 

standards.82

As we reported last year, the Dodd-Frank Act and its implementing rules 

may result in adjustments to SIFIs’ size, interconnectedness, complexity, 

In addition, FSOC designated two nonbank financial 

companies in July 2013 and a third in September 2013. (See app. V for a 

summary of SIFI-related provisions and their rulemaking status.)

 

81S. Rep. No. 111-176 (2010).

8277 Fed. Reg. 594 (Jan. 5, 2012); 77 Fed. Reg, 76,628 (Dec. 28, 2012). See appendix V 

for a summary of select finalized SIFI-related rulemakings.

Indicators Suggest 

Increased Resilience and 

Size of Large SIFIs 

between the Third Quarter 

of 2010 and the Second 

Quarter of 2013
 

Page 36 GAO-14-67 Dodd-Frank Regulations

leverage, or liquidity over time.83 We developed indicators to monitor 

changes in some of these SIFI characteristics. The size and complexity 

indicators reflect the potential for a single company’s financial distress to 

affect the financial system and economy. The leverage and liquidity 

indicators reflect a SIFI’s resilience to shocks or its vulnerability to 

financial distress. Like we did in our last report, we continue to focus our 

analysis on bank SIFIs, given that FSOC only recently designated three 

nonbank financial companies for Federal Reserve supervision.84 Our 

indicators have limitations. For example, the indicators do not identify 

causal links between changes in SIFI characteristics and the act. Rather, 

the indicators track changes in the size, complexity, leverage, and 

liquidity of SIFIs over the period since the Dodd-Frank Act was passed to 

examine whether the changes are consistent with the goals of the act. 

However, other factors—including the economic downturn, international 

banking standards agreed upon by the Basel Committee on Banking 

Supervision (Basel Committee), European debt crisis, and monetary 

policy actions—also affect bank holding companies and, thus, the 

indicators.85

Table 2 summarizes the changes in our bank SIFI indicators from the 

third quarter of 2010 through the second quarter of 2013 and allows for 

These factors may have a greater effect than the Dodd-Frank 

Act on SIFIs. Furthermore, because a number of rules implementing SIFIrelated provisions have not yet been finalized, our indicators include the 

effects of these rules only insofar as SIFIs have changed their behavior in 

response to issued rules and in anticipation of expected rules. In this 

regard, our indicators provide baselines against which to compare future 

trends.

 

83See GAO-13-101. 

84Our analyses of bank SIFIs include U.S. bank holding companies with total consolidated 

assets of $50 billion or more and foreign bank organizations’ U.S.-based bank holding 

company subsidiaries that on their own have total consolidated assets of $50 billion or 

more. 

85The Basel Committee has agreed on a new set of risk-based capital, leverage, liquidity, 

and other requirements for banking institutions (Basel III requirements). Additionally, the 

Financial Stability Board and the Basel Committee have agreed on new capital and other 

requirements applicable to designated globally systemically important banks (G-SIB 

requirements). U.S. banking regulators have implemented some of these requirements, 

and the Federal Reserve has indicated its intention to base some of the SIFI enhanced 

prudential standards on the Basel III and G-SIB requirements. For more details see 

appendix V. 
 

Page 37 GAO-14-67 Dodd-Frank Regulations

the following observations. (See app. VI for more details on our 

indicators.)

• First, the total number of bank SIFIs declined by three, including one 

large bank SIFI, over the period.86

• Second, our complexity indicator suggests that large U.S. bank SIFIs 

in the second quarter of 2013 continue to be relatively more complex

than other U.S. bank SIFIs, but they generally decreased their total 

number of legal entities over the period. In addition, four 2013 large 

bank SIFIs decreased their number or percentage of foreign legal 

entities, while the number of countries where their foreign legal 

entities operated decreased or remained stable over the period. In 

contrast, two 2013 large bank SIFIs increased both their number and 

percentage of foreign legal entities, and for one of them the number of 

countries where its foreign entities operated increased by 50 percent. 

Because of the mixed trends, the change in the spillover effects is 

unclear.

Median assets and median market 

share (measured in assets) for large bank SIFIs increased over the 

period. Even with one less large bank SIFI by mid-2013, the increase 

in the size of large bank SIFIs is consistent with an increase in the 

spillover effect posed by such SIFIs—that is, the potential for such a 

company’s financial distress to affect the financial system and 

economy. In contrast, median assets and median market share 

declined for other bank SIFIs over the period; these trends are 

consistent with a decrease in the spillover effects of those bank SIFIs.

• Third, our indicators suggest that bank SIFIs, on average, have 

decreased their leverage from the third quarter of 2010 to the second 

quarter of 2013, although one of our measures shows that leverage 

for bank SIFIs did not change substantially from mid-2012 to mid2013. Similarly, our liquidity indicators show that bank SIFIs improved 

their liquidity over the period, although one of our measures shows 

that large bank SIFIs’ liquidity deteriorated from mid-2012 to mid2013. Despite these recent trends, the changes in our leverage and 

liquidity indicators from the third quarter of 2010 through the second 

quarter of 2013 are consistent with an improvement in SIFIs’ 

resilience to shocks or vulnerability to financial distress.

 

86In our November 2012 report, we noted that there were seven large bank SIFIs as of the 

second quarter of 2012. Six of them continue to be large bank SIFIs as of the third quarter 

of 2013. In February 2013, the remaining one received regulatory approval to deregister 

as a bank holding company. 
 

Page 38 GAO-14-67 Dodd-Frank Regulations

Table 2: Summary of Trends in Indicators for Bank SIFIs, from Third Quarter 2010 through Second Quarter 2013

Characteristic

Indicator (italicized) and description of 

trend

Consistent with decreased, no change, 

or increased spillover effects or 

resilience?

Size – Size captures the amount of 

financial services or financial 

intermediation that a bank holding 

company provides. 

The number of large bank SIFIs declined by 

one, and the number of other bank SIFIs

declined by two.

Median assets for large bank SIFIs increased 

and median assets for other bank SIFIs

decreased.

The median market share (measured in 

assets) for large bank SIFIs increased and 

median market share for the other bank 

SIFIs decreased.

Consistent with an increase in spillover 

effects of large bank SIFIs.

Consistent with a decrease in spillover 

effects of other bank SIFIs. 

Interconnectedness – 

Interconnectedness captures direct or 

indirect linkages between financial 

institutions that may transmit distress 

from one institution to another. 

None N/A 

Complexity – Operational complexity 

may reflect an institution’s diverse lines 

of business and locations in which the 

institution operates. 

The median number of legal entities for large 

bank SIFIs decreased from 4,991 to 3,682.

Four large bank SIFIs decreased their 

number or percentage of legal entities 

located outside of the United States, and the 

number of countries where their foreign 

entities are located remained stable or 

decreased. For the two other large bank 

SIFIs, the number and percentage of foreign 

legal entities increased and, for one of them, 

the number of countries where the foreign 

entities are located increased.

a Unclear

Leverage – Leverage can be defined

broadly as the ratio between some 

measure of risk exposure and capital that 

can be used to absorb unexpected 

losses from the exposure. Traditionally, it 

has referred to the use of debt, instead of 

equity, to fund an asset and been 

measured by the ratio of total assets to 

equity on the balance sheet. 

The median tangible common equity as a 

percentage of total assets for large and other 

bank SIFIs increased.

The median tangible common equity as a 

percentage of risk-weighted assets for large 

and other bank SIFIs increased.

Consistent with an increase in resilience 

Liquidity – Liquidity represents the 

ability of an institution to fund its assets 

and meet its obligations as they become 

due. 

The median short-term liabilities as a 

percentage of total liabilities for large and 

other bank SIFIs decreased.

The median liquid assets as a percentage of 

short-term liabilities for large and other bank 

SIFIs increased.

Consistent with an increase in resilience 

Sources: GAO analysis of data from the Federal Reserve Bank of Chicago, Bureau of Economic Analysis, and Federal Reserve Board.

a

Trends for our complexity indicators describe changes from June 30, 2010, through June 30, 2013.
 

Page 39 GAO-14-67 Dodd-Frank Regulations

Note: Large bank SIFIs are those with $500 billion or more in assets. Other bank SIFIs are those with 

assets between $50 billion and $500 billion. To calculate the median measures, we calculated the 

relevant indicator measure for each bank holding company, and then reported the median for large 

bank SIFIs, the median for other bank SIFIs, the median for non-SIFI banks, or the median for the 

entire group. See appendix VI for additional information on our SIFI indicators.

According to our updated regression analysis, the Dodd-Frank Act has 

not been associated with a change in the cost of credit provided by U.S. 

bank SIFIs, but has been associated with an increase in the safety and 

soundness of the SIFIs.87 As we have noted, the Dodd-Frank Act requires 

the Federal Reserve to impose a variety of regulatory reforms on SIFIs, 

including enhanced risk-based capital, leverage, and liquidity 

requirements. These reforms may affect the safety and soundness of 

bank SIFIs and the cost and availability of credit provided by bank SIFIs. 

Although capital and leverage requirements may help reduce the 

probability of bank failures and promote financial stability, they could 

cause banks to raise lending rates and limit their ability to provide credit, 

especially during a crisis. Similarly, while stricter liquidity requirements 

may help reduce the probability of bank failures and promote financial 

stability, banks could respond to these requirements by increasing 

lending spreads to offset lower yields on assets or longer maturities on 

liabilities. To the extent that they increase the cost and reduce the 

availability of credit, these reforms may lead to reduced output and 

economic growth.88

Our econometric analysis assesses the initial impact of the Dodd-Frank 

Act’s new requirements for bank SIFIs on (1) the cost of credit they 

provide and (2) their safety and soundness. Our analysis leverages the 

Dodd-Frank Act’s requirement that bank holding companies with total 

consolidated assets of $50 billion or more are subject to enhanced 

regulation by the Federal Reserve but other bank holding companies are 

not. Specifically, we compare funding costs, capital adequacy, asset 

quality, earnings, and liquidity for bank SIFIs and non-SIFI bank holding 

companies before and after the enactment of the Dodd-Frank enhanced 

 

87See appendix VII for more information on our econometric analysis.

88See, for example, Basel Committee on Banking Supervision, An Assessment of the 

Long Term Economic Impact of Stronger Capital and Liquidity Requirements (Basel, 

Switzerland, August 2010), and Basel Committee on Banking Supervision and Financial 

Stability Board, Assessing the Macroeconomic Impact of the Transition to Stronger Capital 

and Liquidity Requirements (Basel, Switzerland, August 2010). 

Enhanced Prudential 

Standards Are Associated 

with Improved Safety and 

Soundness of Bank SIFIs 

but Not with Changes in 

the Cost of Credit since 

Mid-2010
 

Page 40 GAO-14-67 Dodd-Frank Regulations

prudential requirements. All else being equal, the difference in the 

comparative differences is the inferred effect of the Dodd-Frank Act’s 

prudential requirements on bank SIFIs.

Our approach allows us to partially differentiate changes in funding costs, 

capital adequacy, asset quality, earnings, and liquidity associated with the 

Dodd-Frank Act from changes due to other factors. However, several 

factors make isolating and measuring the impact of the Dodd-Frank Act’s 

new requirements for SIFIs challenging. The effects of the act cannot be 

differentiated from the effects of simultaneous changes in economic 

conditions, such as the pace of the recovery from the recent recession, or 

regulations, such as those stemming from Basel III, or other changes, 

such as in credit ratings that differentially may affect bank SIFIs and other 

bank holding companies. In addition, many of the new requirements for 

SIFIs have yet to be implemented. For example, the Federal Reserve is 

required to implement enhanced prudential standards, including capital 

requirements, stress testing, liquidity requirements, single-counterparty 

credit limits, an early remediation regime, and risk-management and 

resolution planning. Only rules for resolution planning and stress testing 

have been finalized.89

Our estimates suggest that the Dodd-Frank Act has not been associated 

with a significant change in U.S. bank SIFIs’ funding costs (table 3). To 

the extent that the cost of credit provided by bank SIFIs is a function of 

their funding costs, the new requirements for SIFIs likely have had little 

effect on the cost of credit to date.

Additionally, the Federal Reserve has proposed to 

implement a quantitative liquidity requirement for bank holding 

companies, savings and loan holding companies, and depository 

institutions with more than $250 billion in total assets and has indicated 

that it plans to impose a capital surcharge on the largest SIFIs. 

Nevertheless, our estimates are suggestive of the initial effects of the 

Dodd-Frank Act on bank SIFIs and provide a baseline against which to 

compare future trends.

 

89See appendix V for the rulemaking status of the enhanced prudential standards. 
 

Page 41 GAO-14-67 Dodd-Frank Regulations

Table 3: Estimated Changes in U.S. Bank SIFIs’ Funding Costs and Measures of Safety and Soundness Associated with the 

Dodd-Frank Act, from Third Quarter 2010 through Second Quarter 2013

Variable Measured as

Estimated change and 

standard error of estimated 

change (percentage points)

Estimated change 

statistically significant at the 

five percent level?

Cost of credit indicator

Funding cost Interest expense as a percentage 

of interest-bearing liabilities 

0.02

(0.02)

No

Safety and soundness 

indicators

Capital adequacy Tangible common equity as a 

percentage of total assets 

1.50

(0.22)

Yes

Tangible common equity as a 

percentage of risk-weighted 

assets 

2.02

(0.36)

Yes

Asset quality Performing assets as a 

percentage of total assets 

0.41

(0.13)

Yes

Earnings Earnings as a percentage of total 

assets 

0.09

(0.03)

Yes

Liquidity Liquid assets as a percentage of 

volatile liabilities 

-1.80

(8.87)

No

Stable liabilities as a percentage 

of total liabilities 

5.12

(1.01)

Yes

Source: GAO analysis of data from the Federal Reserve Bank of Chicago.

Notes: We analyzed data for top-tier bank holding companies that filed form FR Y-9C from the first 

quarter of 2006 through the second quarter of 2013. We estimated the effects of the new SIFI 

requirements on bank SIFIs by regressing the variables listed in the table on indicators for each bank 

holding company, indicators for each quarter, indicators for whether a bank holding company is a SIFI 

for quarters from the third in 2010 through the second in 2013, and other variables controlling for size, 

foreign exposure, securitization income, other nontraditional income, and participation in the Troubled 

Asset Relief Program. Estimated changes are the coefficients on the indicators for whether a bank 

holding company is a SIFI in quarters from the third in 2010 through the second in 2013. We used ttests to assess whether the coefficient on the SIFI indicator was significant at the 5 percent level. For 

more information on our methodology, see appendix VII.

Our estimates also suggest that the Dodd-Frank Act is associated with 

improvements in most measures of U.S. bank SIFIs’ safety and 

soundness. As shown in table 3, bank SIFIs appear to be holding more 

capital than they otherwise would have held in every quarter since the 

Dodd-Frank Act was enacted. The quality of assets on the balance sheets 

of bank SIFIs also seems to have improved since the Dodd-Frank Act 

was enacted. The act is associated with higher earnings for bank SIFIs in 

the time period after the act’s enactment. It is also associated with 

improved liquidity as measured by the extent to which a bank holding 

company is using stable sources of funding. The only measure that has 
 

Page 42 GAO-14-67 Dodd-Frank Regulations

not clearly improved since the act’s enactment is liquidity as measured by 

the capacity of a bank holding company’s liquid assets to cover its volatile 

liabilities. Thus, the Dodd-Frank Act appears to be broadly associated 

with improvements in most indicators of safety and soundness for U.S. 

bank SIFIs. (See app. VII for more details on our regression analysis.)

In general, swaps are types of derivative contracts that involve ongoing 

exchanges of one or more assets, liabilities, or payments for a specified 

period. For example, swaps can be used to exchange fixed-rate interest 

payments for floating interest payments based on market rates (one type 

of interest rate swap), or to protect against the default of a bond issuer 

(one type of credit default swap). Financial and nonfinancial firms use 

swaps and other derivatives to hedge risk, to speculate, or for other 

purposes. Unlike futures, which are standardized financial contracts that 

are traded on exchanges, swaps traditionally have been privately 

negotiated between two counterparties in the over-the-counter (OTC) 

market. Swaps include interest rate swaps, commodity-based swaps, 

equity swaps, and credit default swaps.

In varying degrees and ways, swaps and other OTC derivatives played a 

role in the most recent financial crisis. As FSOC reported, credit default 

swaps (CDS), including AIG’s large holdings of such swaps, exacerbated 

the crisis because they were not well understood by regulators or market 

participants.90

 

90FSOC, Annual Report, 2011.

FSOC also noted that OTC derivatives generally were a 

factor in the propagation of risks during the recent crisis because of their 

complexity and opacity, which contributed to excessive risk taking, a lack 

of clarity about the ultimate distribution of risks, and a loss in market 

confidence. In that regard, the crisis illustrated that swaps and other OTC 

derivatives can contribute to systemic risk in at least two ways. First, 

while swaps can be used to manage risk and increase liquidity, swaps 

generally have not been subject to regulatory requirements for margin 

(i.e., collateral based on the market value of the swap). This allowed 

some swap participants to take large speculative positions using a 

relatively small amount of capital, thereby increasing leverage. Second, 

swaps increased the interconnectedness of the financial system by 

exposing many banks, financial entities, and end-users to the credit risk 

of a small number of swap dealers. The concentration of most OTC 

Swaps Indicators Provide 

Baselines for Assessing the 

Future Impact of Some 

Swap Reforms
 

Page 43 GAO-14-67 Dodd-Frank Regulations

derivatives trading among a small number of dealers created the risk that 

the failure of one of these dealers could expose counterparties to sudden 

losses and destabilize financial markets.

Title VII of the Dodd-Frank Act establishes a new regulatory framework 

for swaps. The act authorizes CFTC to regulate “swaps” and SEC to 

regulate “security-based swaps” with the goals of reducing risk, 

increasing transparency, and promoting market integrity in the financial 

system. Title VII includes the following four major swaps reforms.

• Registration and regulation. The title provides for the registration 

and regulation of swap dealers and major swap participants, including 

subjecting them to (1) prudential regulatory requirements, such as 

minimum capital and minimum initial and variation margin 

requirements and (2) business conduct requirements to address, 

among other things, interaction with counterparties, disclosure, and 

supervision.91

• Mandatory clearing. The title imposes mandatory clearing 

requirements on swaps, but exempts, among others, certain end 

users that use swaps to hedge or mitigate commercial risk.92

• Exchange trading. The title requires swaps subject to mandatory 

clearing to be executed on an organized exchange or swap execution 

facility, unless no facility offers the swap for trading.93

• Mandatory reporting. The title requires all swaps to be reported to a 

registered swap data repository or, if no such repository will accept 

the swap, to CFTC or SEC, and subjects swaps to post-trade 

transparency requirements (real-time public reporting of certain swap 

data).

 

91In general, minimum capital requirements are designed to provide firms with sufficient 

liquidity to meet unsubordinated obligations to customers and counterparties and sufficient 

resources to wind down in an orderly manner without the need for a formal proceeding. 

Minimum margin requirements are generally intended to regulate the amount of credit 

directed into swaps and related transactions and to help protect swaps entities and their 

customers from price fluctuations and against losses arising from undue leverage. 

Minimum margin requirements also can help manage counterparty credit risk. 

92Any entity acting as a clearinghouse, or central counterparty, must register with CFTC, 

SEC, or both, as appropriate (unless granted an exemption) and is subject to regulatory 

requirements established by CFTC, SEC, or both, as appropriate. 

93Organized exchanges and swap execution facilities are subject to comprehensive 

registration, and operational and self-regulatory requirements. 
 

Page 44 GAO-14-67 Dodd-Frank Regulations

Figure 1 illustrates these reforms and some of the differences between 

swaps traded on exchanges and cleared through clearinghouses and 

swaps traded in the OTC market.

Figure 1: Overview of Clearing, Trading, and Reporting Requirements under Dodd-Frank Swaps Reforms

According to the Dodd-Frank Act’s legislative history, key elements for 

reducing systemic risk include increasing the use of central 

clearinghouses and appropriate margining and capital for OTC 
 

Page 45 GAO-14-67 Dodd-Frank Regulations

derivatives.94 CFTC and SEC have issued final rules to implement many 

of the regulatory frameworks for clearing standardized swaps. In 

December 2012, CFTC issued a final rule establishing the first clearing 

requirement for four types of interest rate swaps and two types of CDSs.95

In July 2012, SEC issued a final rule on, among other things, the process 

that the agency will use to determine whether a security-based swap is 

required to be cleared but has not yet subjected any security-based 

swaps to the clearing requirement.96 CFTC, SEC, and the prudential 

banking regulators have proposed rules to implement Dodd-Frank’s 

margin and capital requirements for swap entities, but as of September 

2013, these rules have not yet been finalized.97

Once fully implemented, some provisions in Title VII of the act may help 

achieve the goal of reducing risk, in part by increasing the central clearing 

of swaps and posting of margin for uncleared swaps. We developed two 

sets of indicators to measure changes in (1) the central clearing of swaps 

and (2) the use of margin collateral for OTC derivatives. In this report, 

these indicators provide a baseline for measuring future changes in the 

central clearing of swaps and use of margin collateral, as the Dodd-Frank 

swap reforms have not been fully implemented. In future reports, we plan 

to update these indicators to determine whether changes in central 

clearing and the use of margin collateral are consistent with the act’s 

swap reforms. Importantly, these indicators have several key limitations. 

First, changes in our indicators do not necessarily suggest a change in 

risk, because the intended outcomes of the swap reforms may not 

necessarily reduce systemic risk. For instance, experts, including those 

(See app. VIII for tables 

listing select Dodd-Frank swap reform related rulemakings.)

 

94S. Rep. No. 111-176 (2010). 

9577 Fed. Reg. 74,284 (Dec. 13, 2012). The types of interest rate swaps subject to 

mandatory clearing are fixed rate to floating rate swaps, floating rate to floating rate 

swaps, overnight index swaps, and forward rate agreements. The two types of CDSs 

subject to mandatory clearing are North American untranched CDS Indices and European 

untranched CDS Indices.

9677 Fed. Reg. 41,602 (July 13, 2012).

97See Capital, Margin, and Segregation Requirements for Security-Based Swap Dealers 

and Major Security-Based Swap Participants and Capital Requirements for BrokerDealers, 77 Fed. Reg. 70,214 (Nov. 23, 2012); Margin and Capital Requirements for 

Covered Swap Entities, 76 Fed. Reg. 27,564 (May 11, 2011); Margin Requirements for 

Uncleared Swaps Dealers and Major Swap Participants, 76 Fed. Reg. 23,732 (Apr. 28, 

2011).
 

Page 46 GAO-14-67 Dodd-Frank Regulations

from the IMF, have noted that an increase in central clearing of swaps 

may not, by itself, reduce risk and may increase risk.98

Federal financial regulators have reported that mandatory clearing 

through clearinghouses for certain swaps can reduce risk and provide 

other benefits. As noted by CFTC, central clearing mitigates counterparty 

risk to the extent that the clearinghouse is a more creditworthy 

counterparty relative to the original swap participants.

Second, our 

indicators do not identify causal links between changes in swap market 

and the Dodd-Frank Act, including its regulations. Rather, the indicators 

begin to track changes in central clearing and collateralization in the 

swaps since the Dodd-Frank Act’s passage to examine whether the 

changes are consistent with the act’s swap reform goals for central 

clearing and collateralization.

99

We developed two complementary clearing indicators. Our first indicator 

measures the gross notional amount of swaps that are required to be 

cleared and are being cleared as a percentage of the gross notional 

amount of swaps required to be cleared.

Clearinghouses 

have a variety of tools to monitor and manage counterparty risk, which 

include the contractual right to collect initial and variation margin 

associated with swap positions; issue margin calls whenever the margin 

in a customer’s account has dropped below predetermined levels; and 

close out the swap positions of a customer that does not meet margin 

calls within a specified period. Further, to the extent that swap positions 

move from facing multiple counterparties in the OTC derivatives market to 

being run through a smaller number of clearinghouses, clearing may 

facilitate increased netting, which reduces operational risk and may 

reduce the amount of collateral that a counterparty must post or pay in 

terms of initial and variation margin. Although centralized clearing could 

remove a large portion of the interconnectedness of current OTC markets 

that leads to systemic risk, CFTC and others have noted that central 

clearing, by its nature, concentrates risk in a handful of entities.

100

 

98International Monetary Fund; Global Financial Stability Report: Meeting New Challenges 

to Stability and Building a Safer System (April 2010). 

This indicator shows the 

99See, for example, 77 Fed. Reg. 74,284 (Dec. 13, 2012).

100The gross notional amount is the nominal or face amount that is used to calculate 

payments made on swaps. This amount generally does not change hands and is thus 

referred to as notional.

Central Clearing Indicators
 

Page 47 GAO-14-67 Dodd-Frank Regulations

progress being made by market participants in complying with any 

mandatory clearing requirement.101 All else being equal, an increase in 

this indicator would be consistent with the act’s swaps reforms. However, 

an increase in compliance with mandatory clearing requirements may not 

increase central clearing overall if market participants substitute away 

from swaps that are required to be cleared in favor of swaps that are not 

required to be cleared.102 To assess the extent to which market 

participants are substituting away from swaps that are required to clear, 

we complement our first indicator with a second indicator that measures 

the gross notional amount of swaps that are required to be cleared (but 

are not necessarily cleared) as a percentage of the total gross notional 

amount of the swaps market. This indicator shows the share of the swap 

market comprised by swaps identified for mandatory clearing and helps 

determine the extent to which changes in the first indicator represent 

increases in central clearing overall.103

Our indicators cover only the interest rate swaps and CDS markets, 

because only certain of these types of swaps are currently subject to 

CFTC’s mandatory clearing requirement.

For example, an increase in the 

first indicator—the percentage of swaps that are required to be cleared 

that are cleared—would indicate an increase in central clearing overall if 

the second indicator—the percentage of all swaps that are required to 

clear—does not decrease at the same time. In contrast, if the first 

indicator increases while the second decreases, then some of the 

increase in the first indicator likely is due to substitution away from swaps 

that are required to be cleared in favor of swaps that are not required to 

be cleared, which is not consistent with the act’s swaps reforms.

104

 

101This indicator likely will be less than 100 percent because nonfinancial entities that use 

swaps to hedge or mitigate commercial risk are exempt from the clearing requirement.

These are the two largest 

swaps markets. Based on CFTC’s Swaps Report, the total gross notional 

amounts outstanding of the interest rate swap and CDS markets were 

about $419 trillion and $20 trillion, respectively, as of August 30, 2013. 

102Market participants may also substitute away from swaps subject to a clearing mandate 

to centrally cleared futures contracts, and the overall percentage of centrally cleared 

swaps and futures contracts will not be captured by this indicator. 

103This indicator likely will be less than 100 percent in part because some customized 

swaps will not be required to clear.

104As discussed, SEC has not yet subjected any security-based swaps to a mandatory 

clearing requirement. 
 

Page 48 GAO-14-67 Dodd-Frank Regulations

The indicators are developed using data in the proposed version of 

CFTC’s Swaps Report, which are estimates from a variety of sources that 

voluntarily submit the data.105

Figure 2 shows the trends of our clearing indicators for interest rate 

swaps from January 2013 through August 2013. Our first indicator shows 

that market participants are making progress in meeting the clearing 

requirement: The percentage of swaps required to be cleared and that 

were cleared increased from around 53 percent to around 57 percent 

(based on gross notional amounts). Currently, not all interest rate swaps 

that are required to be cleared are being cleared, in part because CFTC 

is phasing in the requirement by staggering the compliance dates for 

different types of market participants and also because some nonfinancial 

entities that use swaps to hedge or mitigate commercial risk are exempt 

from the clearing requirement. The second indicator shows that interest 

rate swaps that are required to be cleared made up about 88 percent of 

the market (based on gross notional amount), and generally did not 

decrease during the period. This indicates that the increase in the first 

indicator represents an increase in central clearing that is consistent with 

the act’s swaps reforms.

CFTC’s final version of its Swaps Report 

will use data collected in response to Dodd-Frank provisions, and CFTC 

staff stated that the agency was working to implement this transition.

 

105Importantly, the data represent the global market and, according to CFTC staff, likely 

include swaps not under CFTC’s regulatory jurisdiction. In addition, CFTC staff told us that 

the proposed version of the Swap Reports currently does not include data from one swap 

data repository. CFTC staff told us that the final version of the CFTC Swaps Report will 

represent only those swaps that are under CFTC’s regulatory jurisdiction. In updating our 

clearing indicators in the future, we plan to use data from the final version of CFTC’s Swap 

Report. If significant differences exist between the data in the proposed and final Swaps 

Reports, this year’s indicators may not serve as a useful baseline, and we will make 

adjustments in future reports, as necessary and possible.
 

Page 49 GAO-14-67 Dodd-Frank Regulations

Figure 2: Trends in Central Clearing of Interest Rate Swaps (by Percentage of Gross Notional Value of Swaps), from January 

2013 through August 2013

Note: The types of interest rate swaps that are required to clear are fixed-to-floating rate swaps, basis 

swaps, forward rate agreements, and overnight index swaps. We used weekly data from CFTC 

Swaps Reports for the period from January 2, 2013, to August 28, 2013, to calculate (1) the gross 

notional amount of interest rate swaps that are required to clear and that actually cleared as a 

percentage of the gross notional amount of interest rate swaps that are required to clear and (2) the 

gross notional amount of interest rate swaps that are required to clear as a percentage of the total 

gross notional amount of interest rate swaps. In its rule requiring central clearing of interest rate 

swaps, CFTC set the earliest compliance date for March 2013. CFTC staff told us that they examined 

the rapid increase and decrease in the rate of central clearing of interest rate swaps on June 28, 2012 

and July 5, 2012, respectively. CFTC staff told us that the change appeared to result largely from a 

decrease in uncleared interest rate swaps, and that they are looking further into the matter.

Figure 3 shows the trends of our two clearing indicators for CDSs from 

January 2013 through August 2013. Our first indicator shows that, based 

on gross notional amount, about 27 percent of swaps required to be 

cleared were cleared at the end of the period, compared to about 24 

percent at the beginning of the period. The second indictor shows that, 

based on gross notional amount, CDSs required to be cleared accounted 

for about 35 percent of the market at the end of the period, compared to 

about 30 percent at the beginning of the period. This trend in the 

percentage of all CDSs that are required to clear is not consistent with 

market participants substituting away from CDSs that are required to 

clear in favor of CDSs that are not required to clear. It follows that the 

increase in the percentage of required-to-clear CDSs that cleared over 

the period generally is consistent with the act’s swaps reforms.
 

Page 50 GAO-14-67 Dodd-Frank Regulations

Figure 3: Percentage of Credit Default Swaps Centrally Cleared (by Gross Notional Value of Swaps), from January 2013 

through August 2013

Note: The types of credit default swaps that are required to clear are untranched European and North 

American index credit default swaps. We used weekly data from CFTC Swaps Reports for the period 

from January 2, 2013, to August 28, 2013, to calculate (1) the gross notional amount of credit default 

swaps that are required to clear and that actually cleared as a percentage of the gross notional 

amount of credit default swaps that are required to clear and (2) the gross notional amount of credit 

default swaps that are required to clear as a percentage of the total gross notional amount of credit 

default swaps. In its rule requiring central clearing of CDS, CFTC set the earliest compliance date for 

March 2013. 

We developed a second set of indicators to measure changes in the 

collection of margin collateral for OTC derivatives.106

 

106Our indicators use data collected by the Federal Reserve on form FR Y-9C, which 

currently requires bank, financial, and savings and loan holding companies with more than 

$10 billion in assets to report their net current credit exposure to counterparties in OTC 

derivatives contracts and the fair value of the collateral pledged by those counterparties to 

secure the contracts.

The first margin 

indicator measures the fair value of collateral pledged by all 

counterparties to secure OTC derivatives contracts as a percentage of 

net current credit exposure to those counterparties for bank, financial, and 

savings and loan holding companies that reported positive credit 

Margin Indicators 
 

Page 51 GAO-14-67 Dodd-Frank Regulations

exposure.107 The second set of margin indicators measures collateral 

pledged by different types of counterparties—banks and securities firms, 

monoline financial guarantors, hedge funds, sovereign governments, and 

corporations and all other counterparties—as a percentage of credit 

exposure to different types of counterparties. The net current credit 

exposure approximates the credit loss that a bank, financial, or savings 

and loan holding company would suffer if its counterparties defaulted on 

their OTC derivatives contracts.108

Although CFTC, SEC, and the prudential regulators have not finalized 

their margin rules for uncleared swaps, figures 4 and 5 show the trends in 

our margin indicators from the second quarter of 2009 through the fourth 

quarter of 2012. Figure 4 shows that holding companies in our sample 

have increased the rate of collateralization of their net current credit 

exposure from OTC derivatives from 62 percent to 82 percent over the 

period, suggesting that these holding companies are requiring their 

counterparties to post a greater amount of collateral against their 

derivatives contracts. However, as discussed later, aggregate measures 

of collateralization rates can mask differences in collateralization rates for 

different counterparty types.

To protect itself from such a loss, a 

swap entity can require its counterparties to post margin collateral in an 

amount equal to or greater than the exposure of the contracts. An 

increase in these indicators would suggest that holding companies are 

requiring their counterparties to post a greater amount of collateral 

against their credit exposure due to derivatives contracts overall, which 

would be consistent with the purposes of the act’s swap reforms.

 

107The fair value of collateral is the amount that would be received if the collateral was 

sold in an orderly transaction between market participants in its principal market on the 

measurement date.

108Net current credit exposure to a counterparty is derived by first calculating the fair 

values of all derivative contracts with that counterparty, where the fair value of a derivative 

contract is analogous to the fair value of collateral. If a legally enforceable bilateral netting 

agreement is in place, the fair values of all applicable derivative contracts in the scope of 

the netting agreement with that counterparty are netted to a single amount, which may be 

positive, negative, or zero. Net current credit exposure across all counterparties is the sum 

of the gross positive fair values for counterparties without legal netting arrangements and 

the net current credit exposure for counterparties with legal netting agreements.
 

Page 52 GAO-14-67 Dodd-Frank Regulations

Figure 4: Fair Value of Collateral as a Percentage of Net Current Credit Exposure from OTC Derivatives Contracts for All 

Counterparty Types Combined, from Second Quarter 2009 through Second Quarter 2013

Note: To calculate the fair value of collateral as a percentage of net current credit exposure for all 

counterparty types, we used quarterly data on bank, financial, and savings and loan holding 

companies from form FR Y-9C for the period from second quarter 2009 to second quarter 2013. For 

each quarter, we used data for all holding companies that reported positive net current credit 

exposure to at least one type of counterparty, and we divided total fair value of collateral pledged by 

all counterparty types for all of these holding companies by total net current credit exposure to all 

counterparty types for all of these holding companies.

Figure 5 shows that the rate of collateralization of net current credit 

exposure from OTC derivatives has consistently differed by the type of 

counterparty, with hedge funds posting the most collateral as a 

percentage of credit exposure and sovereign governments typically 

posting the least. According to OCC, the rates differ, in part, because 

swap dealers may require certain counterparties, such as hedge funds, to 

post both initial and variation margin and other counterparties, such as 

banks and securities firms, to post only variation margin. Depending on 

how the margin rules are finalized, the rates of collateralization for some 

counterparties may increase.
 

Page 53 GAO-14-67 Dodd-Frank Regulations

Figure 5: Fair Value of Collateral as a Percentage of Net Current Credit Exposure from OTC Derivatives Contracts by 

Counterparty Type, from Second Quarter 2009 through Second Quarter 2013

Note: To calculate the fair value of collateral as a percentage of net current credit exposure for each 

counterparty type, we used quarterly data on bank, financial, and savings and loan holding 

companies from form FR Y-9C for the period from second quarter 2009 to second quarter 2013. For 

each quarter and for each counterparty type, we used data for all holding companies that reported 

positive net current credit exposure to that counterparty type, and we divided total fair value of 

collateral pledged by that counterparty type for all of these holding companies by total net current 

credit exposure to that counterparty type for all of these holding companies.

Our margin indicators are subject to important limitations. First, both net 

current credit exposure and the fair value of collateral are as of a point in 

time because the fair values of derivatives contracts and collateral can 

fluctuate over time. Second, an average collateralization of 100 percent 

does not ensure that all current counterparty exposures have been 

eliminated, because one counterparty’s credit exposures may be 

overcollateralized but another counterparty’s credit exposure may be 

undercollateralized. Third, our indicators measure the fair value of the 

collateral held against net current credit exposures but do not necessarily 

measure the risk of uncollateralized losses. The fair value of net current 

credit exposure does not fully account for the riskiness of any single swap 

contract, so it is possible for the rate of collateralization to increase while 

the risk of uncollateralized losses also has increased, if a party has 

entered into riskier swaps. Fourth, there are over 1,000 holding 
 

Page 54 GAO-14-67 Dodd-Frank Regulations

companies in our sample, but less than 100 holding companies report 

positive credit exposure to counterparties in OTC derivatives contracts 

and five holding companies account for over 95 percent of the total gross 

notional amount of all derivatives contracts reported by all of the holding 

companies in our sample. Thus, trends in these indicators largely reflect 

collateralization rates for a small number of holding companies. Finally, 

these indicators do not reflect collateralization rates for companies, such 

as standalone broker-dealers, that have credit exposure to counterparties 

in OTC derivatives contracts but are not affiliated with a bank, financial, or 

savings and loan holding company.

Federal financial regulators vary in their approaches and progress in 

developing and implementing plans to conduct retrospective reviews of 

their existing Dodd-Frank and other rules in recognition of Executive 

Order 13,579 (E.O. 13,579).109

Most federal financial regulators told us that they were not developing 

retrospective review plans specifically in response to E.O. 13,579. As a 

matter of policy or to satisfy statutory obligations, federal financial 

regulators generally had been conducting retrospective reviews before 

Issued in July 2011, E.O. 13,579 seeks to 

facilitate the periodic review of existing significant regulations by asking 

independent regulatory agencies to consider how best to promote 

retrospective analysis of rules that may be outmoded, ineffective, 

insufficient, or excessively burdensome. Retrospective reviews 

complement the prospective analysis that agencies conduct as part of 

their rulemaking (discussed above) and can provide insights on how 

regulations actually are working. E.O 13,579 represents the first time the 

President has issued an executive order to ask independent regulatory 

agencies to produce retrospective review plans for public scrutiny. But 

independent regulators, such as the federal financial regulators, are not 

required to follow this order.

 

109Exec. Order No. 13,579. 76 Fed. Reg. 41,587 (July 14, 2011). Section 2 of the order 

emphasizes the importance of retrospective analysis of rules. It contains a “look back” 

provision: “Within 120 days of the date of this order, each independent regulatory agency 

should develop and release to the public a plan, consistent with law and reflecting its 

resources and regulatory priorities and processes, under which the agency will periodically 

review its existing significant regulations to determine whether any such regulations 

should be modified, streamlined, expanded, or repealed so as to make the agency’s 

regulatory program more effective or less burdensome in achieving the regulatory 

objectives.” 

Regulators Vary in Their 

Approaches and Progress 

in Developing 

Retrospective Review 

Plans
 

Page 55 GAO-14-67 Dodd-Frank Regulations

the issuance of E.O. 13,579. In that regard, the prudential regulators told 

us that they generally view their retrospective rule reviews conducted in 

accordance with statute or policy to be consistent with the order’s 

principles and objectives. For example, prudential regulators noted that 

the Economic Growth and Regulatory Paperwork Reduction Act of 1996 

(EGRPRA) requires them to review their regulations at least once every 

10 years and identify and eliminate any regulatory requirements that are 

outdated, unnecessary, or unduly burdensome.110 The regulators 

reported on the results of their last EGRPRA review in July 2007, which 

was done over a 3-year period.111

 

110Pub. L. No. 104-208, Div. A, Tit. II, § 2222, 110 Stat. 3009-394, 3009-414 (1996) 

(codified at 12 U.S.C. § 3311).

During the review, the regulators 

undertook various efforts to reduce regulatory burden on their supervised 

institutions, including by streamlining supervisory processes. They also 

identified four areas to explore further for opportunities to revise 

regulations: suspicious activity reports, lending limits, the Basel II capital 

framework, and consumer disclosures. The next EGRPRA review must 

be completed by 2016. Three prudential regulators told us that they are 

actively planning for the review. According to one prudential regulator, 

CFPB, the Federal Reserve, FDIC, NCUA, and OCC, are working in a 

collaborative fashion under the auspices of the Federal Financial 

Institutions Examination Council to develop a program to conduct a 

comprehensive review of the regulations under EGRPGRA. In addition, 

some prudential regulators have conducted periodic, retrospective 

reviews of their existing rules as a matter of policy or practice. For 

example, NCUA has a policy of reviewing one-third of its rules on an 

annual basis, and the Federal Reserve has a policy of reviewing each of 

its rules at least once every 5 years. FDIC is undertaking a review of its 

regulations to eliminate and reduce unnecessary regulatory burden in 

light of the regulations it incorporated when it took on supervision of statecharted thrifts upon the dissolution of the Office of Thrift Supervision. In 

addition, according to FDIC staff, the agency recently revised its policies, 

in part, to reaffirm its commitment to periodically undertake a review of 

each FDIC regulation and policy statement. Lastly, as part of its effort to 

integrate the Office of Thrift Supervision into its agency, OCC has been 

undertaking a comprehensive review of its and the Office of Thrift 

111Joint Report to Congress July 31, 2007; Economic Growth and Regulatory Paperwork 

Reduction Act. 72 Fed. Reg. 62,036 (Nov. 1, 2007). 
 

Page 56 GAO-14-67 Dodd-Frank Regulations

Supervision’s regulations to eliminate duplication and reduce 

unnecessary regulatory burden.

According to CFPB officials, the agency is not developing a retrospective 

review plan in response to E.O. 13,579 but, instead, is focusing on 

fulfilling its retrospective review requirements under section 1022 of the 

Dodd-Frank Act. Under the act, CFPB is required to assess 

retrospectively each significant rule or order adopted by CFPB under 

federal consumer financial law to address, among other things, the rule or 

order’s effectiveness in meeting the act’s purposes and goals. CFPB is 

required to publish a report of its assessment no later than 5 years after 

the rule or order’s effective date, and is required to solicit public comment 

to inform its assessment. The officials said that they are in the initial stage 

of developing a review plan, which includes identifying what data will be 

needed and how such data can be collected, but have not yet drafted a 

plan. According to the officials, after the section 1022 reviews are 

completed and based on any lessons learned, CFPB may develop a plan 

pursuant to E.O. 13,579 to review its existing rules on a recurring basis. 

In a related effort, CFPB requested public comment in December 2011 on 

streamlining regulations it inherited from other federal agencies.112 As a 

result of the comments received, CFPB has identified several priority 

areas for regulatory action.113

Only CFTC and SEC voluntarily developed retrospective review plans in 

response to the executive order. In a June 2011 request for information, 

CFTC outlined a two-phase plan to conduct periodic, retrospective 

reviews of its existing regulations.114

 

11276 Fed. Reg. 75,825 (Dec. 5. 2011).

Under the first phase, CFTC has 

examined and revised a number of its existing regulations as part of its 

113For example, in May 2013, CFPB issued a final rule amending the ability-to-pay 

regulations under the Credit Card Accountability Responsibility and Disclosure Act of 2009 

in response to industry participants’ comments to its December 2011 request. 78 Fed. 

Reg. 25,818 (May 3, 2013).

11476 Fed. Reg. 38,328 (June 30, 2011). CFTC’s release responded to Executive Order 

13,563, entitled ‘‘Improving Regulation and Regulatory Review,’’ which supplements and 

reaffirms Executive Order 12,866 partly by incorporating its principles, structures, and 

definitions. Exec. Order 13,563, 76 Fed. Reg. 3821 (Jan. 18, 2011). Section 6 of the order 

focuses on the importance of maintaining a consistent culture of retrospective review and 

analysis by agencies of their regulatory programs. Shortly after the issuance of Executive 

Order 13,563, the President issued E.O. 13,579 to encourage independent regulatory 

agencies to comply with E.O. 13,563. 
 

Page 57 GAO-14-67 Dodd-Frank Regulations

implementation of the Dodd-Frank Act. Under the second phase, CFTC 

plans to conduct retrospective reviews of the remainder of its regulations 

after substantial completion of its Dodd-Frank rulemakings. CFTC has 

provided OMB with periodic status reports on its retrospective review plan 

and reported in July 2013 that it still is in phase one. In a September 2011 

request for information, SEC requested public comments to assist it in 

developing a retrospective review plan as part of its ongoing efforts to 

update its regulations and in light of E.O. 13,579.115 At the same time, 

SEC noted that it has formal and informal processes for reviewing 

existing rules to assess their continued utility and effectiveness.116

In July 2011, OMB issued guidance on E.O. 13,579 and noted that each 

agency should exercise its discretion to develop a retrospective review 

plan tailored to its specific mission, resources, organizational structure, 

and rulemaking history and volume.

According to SEC staff, they have reviewed public comments received in 

response to the release and worked on a draft plan, but the agency has 

not yet approved or issued a final plan.

117

• Public participation. Per OMB’s guidance, agencies should solicit 

the views of the public on how best to promote retrospective analysis 

of rules. Even before plans are written, for example, the public might 

be asked to provide comments on how such plans might be devised 

and to help identify those rules that might be modified, streamlined, 

expanded, or repealed. Regulators generally have sought public input 

or plan to seek public input about their retrospective review plans. In 

their Federal Register releases, CFTC and SEC requested public 

comments on various aspects of their plans. Under the EGRPRA 

review, the prudential regulators are required under EGRPRA to 

According to the guidance, each 

agency should set its own priorities, but its retrospective review plans 

might address the following five topics. As federal financial regulators 

vary in the development and implementation of their retrospective review 

plans, they also vary in the extent to which they address or plan to 

address the topics outlined in OMB’s guidance.

 

11576 Fed. Reg. 56,128 (Sept.12, 2011). 

116For example, SEC noted that it retrospectively reviews rules based on suggestions 

from investors, investor and industry groups, and others and as required by section 610(a) 

of the Regulatory Flexibility Act. 

117M-11-28 (July 22, 2011).
 

Page 58 GAO-14-67 Dodd-Frank Regulations

categorize regulations by type and seek public comment on them. 

According to FDIC staff, prudential regulators currently are discussing 

how best to obtain public input for the EGRPRA process. Each year, 

NCUA invites the public to comment on the rules proposed for review 

that year. Also, CFPB is required to solicit public comment to inform 

its statutorily required retrospective reviews.

• Prioritization. Per OMB’s guidance, the plan should specify factors 

that the agency will consider and the process that the agency will use 

in setting priorities and selecting rules for review. To the extent 

feasible, the plan should also include an initial list of candidate rules 

for review over the next two years, with clear timelines and deadlines. 

Regulators generally have not specified the factors that they will use 

to prioritize and select rules for review but have indicated that they 

plan to do so. CFTC and SEC asked for public comments on the 

factors they should use to prioritize and select rules for review. In its 

plan, CFTC noted that its Regulatory Review Group, consisting of 

senior staff, will recommend to the CFTC Commission a list of 

candidate rules for review, in part based on public comments. Under 

the EGRPRA review, the prudential regulators are required to 

categorize regulations by type and seek public comment on them to 

identify regulatory areas that are outdated, unnecessary, or unduly 

burdensome. According to FDIC staff, prudential regulators are 

developing a plan to efficiently and effectively complete the EGRPRA 

review process. Lastly, CFPB’s review under the Dodd-Frank Act 

must cover all of its significant rules, and NCUA’s review covers onethird of the agency’s rules annually.

• Analysis of costs and benefits. Per OMB’s guidance, agencies may 

find it useful to engage in a retrospective analysis of the costs and 

benefits (both quantitative and qualitative) of regulations chosen for 

review. The guidance suggests that the plan may address the metrics 

that the agency will use to evaluate regulations after they have been 

implemented, and the steps the agency has taken to ensure that it 

has high-quality data and robust models with which to conduct 

retrospective analyses. Regulators generally have not yet specified 

the metrics they will use to evaluate regulations or steps to be taken 

to ensure that they have high-quality data with which to conduct their 

retrospective analysis. SEC asked for public comments on, among 

other things, how it can obtain and consider data and analyses to 

assess the benefits of its rules. Likewise, CFPB officials told us that 

they are exploring what data they may collect to analyze their rules.

• Structure and staffing. Per OMB’s guidance, responsibility for 

retrospective review should be vested with a high-level agency official 

who can secure cooperation across the agency. The plan should also 

consider how best to maintain sufficient independence from the 
 

Page 59 GAO-14-67 Dodd-Frank Regulations

offices responsible for writing and implementing regulations. Finally, 

the plan should identify possible actions to strengthen internal review 

expertise, if necessary. Regulators generally expect their office of 

general counsel or other nonrulemaking group to be responsible for 

overseeing implementation of their plans. For example, SEC has 

indicated that its Division of Economic and Risk Analysis will conduct 

the retrospective evaluations, and CFTC plans to form a group of 

senior staff that will implement its retrospective review plan. CFPB 

officials told us that the agency’s research group likely will oversee the 

reviews. NCUA’s Office of General Counsel conducts the agency’s 

retrospective reviews.

• Coordination with other forms of retrospective analysis and 

review. Per OMB’s guidance, many independent agencies already 

are engaged in retrospective analysis and review under existing 

requirements and authorities. The guidance states that it is 

appropriate to use existing processes and information as significant 

inputs into plans. As discussed, prudential regulators are using their 

existing retrospective reviews in lieu of developing specific 

retrospective review plans in response to E.O. 13,579.

Revisiting their retrospective analyses of their Dodd-Frank regulations 

after the regulations are implemented will allow regulators to determine 

whether regulations are achieving their intended purpose without creating 

unintended consequences that negatively impact the markets. Such 

reviews can also signal whether changes should be made to the existing 

rules to better achieve their intended purposes. In our prior work, we 

identified procedures and practices that could be particularly helpful in 

improving the effectiveness of retrospective reviews.118 In particular, we 

noted that agencies would be better prepared to undertake reviews if they 

had identified the needed data before beginning a review and, even 

better, before promulgating the rule. If agencies fail to plan for how they 

will measure the performance of their rules and how they will obtain the 

data they need to do so, they may be limited in their ability to accurately 

measure the progress or true effect of the regulations. In that regard, we 

recommended in our prior report that the federal financial regulators 

develop plans that determine how they will measure the impact of DoddFrank regulations—for example, determining how and when to collect, 

analyze, and report needed data.119

 

118See GAO, Reexamining Regulations: Opportunities Exist to Improve Effectiveness and 

Transparency of Retrospective Reviews, 

To date, regulators have not 

GAO-07-791 (Washington, D.C.: July 16, 2007). 

119See GAO-12-151. 
 

Page 60 GAO-14-67 Dodd-Frank Regulations

implemented our recommendation. We maintain that doing so would 

position them to make their future retrospective reviews as robust as 

possible.

Federal financial regulators have considerable work under way to 

implement the Dodd-Frank Act reforms that could improve the U.S. 

financial system in many ways. However, much work remains to 

implement the reforms. For example, many rulemakings are yet to be 

finalized. Moreover, completing the rulemaking process does not mean 

that reforms are fully implemented. Rather, it will take time—beyond the 

time spent on finalizing the rulemakings—for regulators and industry to 

adopt the reforms contained in the rulemakings, and even longer to 

determine the actual effect of the reforms.

To date, OMB, in consultation with federal agencies, has classified 36 of 

the Dodd-Frank rules as major under CRA and, thus, expects them to 

have a large effect on the economy. As provided by CRA, these rules 

could not take effect until the later of 60 days after Congress receives the 

rule report, or 60 days after the rule is published in the Federal Register, 

as long as Congress does not pass a joint resolution of disapproval. OMB 

provided guidance on implementing CRA in 1999, but such guidance 

does not establish standardized processes for submitting rules to OMB 

for its review or applying CRA’s criteria. 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 CRA criteria. These inconsistent processes could lead to the 

inconsistent classification of some rules. To the extent that any major 

rules are not being classified as such, those rules would not be subject to 

the 60-day congressional notice required under CRA before major rules 

become effective.

To help ensure that OMB, in consultation with federal financial regulators, 

consistently classifies Dodd-Frank rules as major under CRA, we 

recommend that the Director of OMB, through the Administrator of the 

Office of Information and Regulatory Affairs, issue additional guidance to 

help standardize processes for identifying major rules under CRA, 

including on (1) the extent to which agencies should submit rules to OMB 

for review, such as whether agencies should submit only those rules their 

analyses indicate are major or all rules, and (2) how agencies should 

apply CRA’s major rule criteria in their analyses, such as whether 

agencies should include indirect benefits or costs, combine benefits or 

Conclusions 

Recommendations for 

Executive Action
 

Page 61 GAO-14-67 Dodd-Frank Regulations

costs of separate but related rules, or aggregate benefits or costs for 

jointly issued rules.

We provided a draft of this report to CFPB, CFTC, FDIC, the Federal 

Reserve Board, FSOC, NCUA, OMB, OCC, SEC, and Treasury for review 

and comment. CFPB, CFTC, FDIC, the Federal Reserve Board, FSOC, 

OMB, OCC, SEC, and Treasury provided technical comments, which we 

have incorporated, as appropriate. Treasury (on behalf of FSOC) and 

NCUA provided written comments that we have reprinted in appendixes 

IX and X, respectively. In its comment letter, Treasury noted that FSOC 

has taken a variety of actions to facilitate coordination and consultation 

among financial regulators, such as through its deputies and functional 

committees, and continually seeks ways to further enhance collaboration. 

We describe these actions in the draft report. In its letter, NCUA agreed 

with our findings, conclusions, and recommendation. 

OMB staff provided comments on a draft of our report via e-mail through 

their GAO liaison on November 25, 2013. In those comments, OMB 

disagreed with our findings and recommendation concerning OMB’s 

application of the major rule criteria under CRA. Specifically, OMB 

disagreed with our findings that OMB inconsistently applied CRA criteria 

in its designation of major rules and stated that the examples in our draft 

report are not actual inconsistencies in the application of the CRA criteria. 

In addition, OMB noted that two of our examples reflected a challenge 

faced by OMB in determining whether a rule is major. Specifically, 

agencies often do not have the data needed to conduct a precise analysis 

of a rule’s economic impact but, nevertheless, will recommend that a rule 

be designated as major if their analysis strongly suggests that the rule 

may be major. OMB said that in these circumstances, it generally will rely 

on an agency’s expert judgment and concur with its recommendation. 

Furthermore, OMB said that even if some rule determinations under CRA 

were inconsistent, such outcomes may not result in any real-world 

consequence. For example, a rule incorrectly determined to be non-major 

under CRA could have an effective date less than 60 days after the rule’s 

submission to Congress, but only if the agency did not plan to set the 

rule's effective date 60 or more days after the rule’s submission. Finally, 

given these concerns, OMB questioned what new guidance to agencies 

would entail. Therefore, OMB suggested eliminating the recommendation 

from the draft report.

We maintain that the findings and recommendation on the major rule 

designation process are appropriate. First, we did not seek to determine 

Agency Comments 

and Our Evaluation
 

Page 62 GAO-14-67 Dodd-Frank Regulations

whether any of the individual rules we reviewed were misclassified under 

CRA. Instead, our analysis identified examples in which federal agencies 

used different processes (1) for submitting their rules and supporting 

analyses to OMB and (2) in applying the CRA major rule criteria, which 

we concluded could lead to inconsistent classifications of similar rules 

under CRA. Indeed, determining whether any of the rules we reviewed 

actually were misclassified is not possible without clear guidance on 

whether agencies, for example, may consider a rule's indirect 

consequences, combine similar rules, or add a rule's benefits and costs in 

developing their designation recommendation. Our recommendation 

serves to address this gap in guidance and help ensure more 

standardized processes. We clarified a heading in the draft report to 

reflect our focus on the processes used by OMB and federal financial 

regulators. 

Second, we agree that federal financial regulators face challenges in 

quantifying the benefits and costs of their rules and have highlighted such 

challenges in our prior reports.120

Third, CRA gives Congress 60 days to review a major rule before the rule 

can become effective, during which time Congress can issue a joint 

resolution disapproving the rule. While OMB notes that there might not be 

a real-world consequence if a rule is misclassified as non-major, this 

outcome relies on the issuing agency setting an effective date for the rule 

of at least 60 days after a rule’s submission to Congress. Moreover, such 

a misclassification could infringe upon Congress’s ability to reject the rule. 

Additionally, under CRA, GAO is required to provide Congress with a 

report on each major rule that contains GAO’s assessment of each 

issuing agency’s compliance with the procedural steps required by 

various acts and executive orders, including preparation of a cost-benefit 

analysis. In its mandated annual reports to Congress discussing the 

benefits and costs of federal regulations, OMB has stated that it uses 

GAO major rule reports as the sole source of information for analyzing 

However, again, our findings and 

recommendation focus on inconsistencies in the processes used by OMB 

and federal financial regulators to designate major rules under CRA—not 

on the analyses conducted by the regulators. 

 

120GAO-12-151 and GAO-13-101. 
 

Page 63 GAO-14-67 Dodd-Frank Regulations

major rules issued by independent regulatory agencies.121

Finally, although OMB issued guidance to federal agencies in 1999 on 

implementing CRA, the guidance did not clearly articulate the processes 

agencies should use to (1) submit their rules and analysis to OMB or (2) 

apply the CRA major rule criteria. In the absence of such guidance, we 

found that federal financial regulators varied in the processes they used 

to submit rules and analysis to OMB and their application of CRA criteria. 

For example, as we discuss in the report, SEC and CFPB staff told us 

that they did not know whether they were permitted to add costs and 

benefits or combine rules, respectively, in assessing whether a rule was 

major. In that regard, we maintain that additional guidance on the 

processes we identified would enhance the ability of OMB and federal 

financial regulators to fulfill their responsibilities under CRA. 

A 

misclassification of a major rule as non-major would mean that 

information on that rule would not be highlighted to Congress and the

public in a GAO report and would, in turn, not be considered in OMB’s 

annual reports to Congress on the benefits and costs of federal 

regulations. 

We are sending copies of this report to CFPB, CFTC, FDIC, the Federal 

Reserve Board, FSOC, NCUA, OMB, OCC, SEC, Treasury, interested 

congressional committees and members, and others. This report will also 

be available at no charge on our website at http://www.gao.gov. 

 

121OMB is required to produce annual reports to Congress on the benefits and costs of 

federal regulations. Consolidated Appropriations Act of 2001, Pub. L. No. 106-554, § 624, 

114 Stat. 2763, 2763A-161 (2000) (codified at 31 U.S.C. § 1105 note). See, for example, 

OMB, 2013 Draft Report to Congress on the Benefits and Costs of Federal Regulations 

and Agency Compliance with the Unfunded Mandates Reform Act (Washington, D.C: 

2013); and OMB, 2012 Report to Congress on the Benefits and Costs of Federal 

Regulations and Unfunded Mandates on State, Local, and Tribal Entities (Washington, 

D.C: 2012). 
 

Page 64 GAO-14-67 Dodd-Frank Regulations

Should you or your staff have questions concerning this report, please 

contact me at (202) 512-8678 or clowersa@gao.gov. Contact points for 

our Offices of Congressional Relations and Public Affairs may be found 

on the last page of this report. Key contributors to this report are listed in 

appendix XI. 

A. Nicole Clowers

Director Financial Markets and Community Investment
 

Page 65 GAO-14-67 Dodd-Frank Regulations

List of Addressees

The Honorable Harry Reid

Majority Leader

The Honorable Mitch McConnell

Minority Leader

United States Senate

The Honorable John Boehner

Speaker

The Honorable Nancy Pelosi

Minority Leader

House of Representatives

The Honorable Debbie Stabenow

Chairwoman

The Honorable Thad Cochran

Ranking Member

Committee on Agriculture, Nutrition and Forestry

United States Senate

The Honorable Barbara A. Mikulski

Chairwoman

The Honorable Richard Shelby

Vice Chairman

Committee on Appropriations

United States Senate

The Honorable Tim Johnson

Chairman

The Honorable Michael Crapo

Ranking Member

Committee on Banking, Housing, and Urban Affairs

United States Senate

The Honorable John D. Rockefeller IV

Chairman

The Honorable John Thune

Ranking Member

Committee on Commerce, Science, and Transportation

United States Senate
 

Page 66 GAO-14-67 Dodd-Frank Regulations

The Honorable Frank D. Lucas

Chairman

The Honorable Collin C. Peterson

Ranking Member

Committee on Agriculture

House of Representatives

The Honorable Harold Rogers

Chairman

The Honorable Nita Lowey

Ranking Member

Committee on Appropriations

House of Representatives

The Honorable Fred Upton

Chairman

The Honorable Henry A. Waxman

Ranking Member

Committee on Energy and Commerce

House of Representatives

The Honorable Jeb Hensarling

Chairman

The Honorable Maxine Waters

Ranking Member

Committee on Financial Services

House of Representatives
Appendix I: Objectives, Scope, and 

Methodology

Page 67 GAO-14-67 Dodd-Frank Regulations

This report examines rulemaking under the Dodd-Frank Wall Street 

Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). More 

specifically, we examined (1) the regulatory analysis conducted by federal 

agencies in their Dodd-Frank rulemakings, including their assessments of 

which rules they considered to be major rules under the Congressional 

Review Act (CRA); (2) interagency coordination by the agencies in their 

Dodd-Frank rulemakings and by the Consumer Financial Protection 

Bureau (CFPB) with other agencies in connection to its supervision of 

large banks and certain nonbank financial service providers; and (3) 

possible impact of selected Dodd-Frank provisions and their 

implementing regulations and agency plans to assess such regulations 

retrospectively.1

To examine the regulatory analyses and coordination conducted by the 

regulators, we focused our analysis on final rules issued pursuant to the 

Dodd-Frank Act that became effective from July 24, 2012, through July 

22, 2013, a total of 70 rules (see app. II). To identify these rules, we used 

a website maintained by the Federal Reserve Bank of St. Louis that 

tracks Dodd-Frank regulations.2

In examining the regulatory analyses of the federal agencies in our 

review, we reviewed federal statutes, regulations, GAO studies, and other 

material to identify the regulatory analyses, including benefit-cost 

analysis, required to be conducted by the federal agencies as part of their 

Dodd-Frank rulemakings. Of the 70 rules within our scope, 59 rules were 

substantive regulations— generally subject to public notice and comment 

We corroborated the data with officials 

from the agencies under review.

 

1

The agencies covered in our review are the federal financial regulators, the Financial 

Stability Oversight Council, and the Department of the Treasury. We use the term “federal 

financial regulators” to refer to the Consumer Financial Protection Bureau, Commodity 

Futures Trading Commission, Federal Deposit Insurance Corporation, Federal Reserve, 

Office of the Comptroller of the Currency, National Credit Union Administration, and 

Securities and Exchange Commission. 

2

In this report, we use the terms “rules,” “regulations,” or “rulemakings” generally to refer 

to Federal Register notices of agency action pursuant to the Dodd-Frank Act, including 

regulations, interpretive rules, general statements of policy, guidance, and rules that deal 

with agency organization, procedure, or practice. Combined with our past two reports, we 

have reviewed all Dodd-Frank Act rules in effect as of July 22, 2013. See GAO, DoddFrank Act Regulations: Implementation Could Benefit from Additional Analyses and 

Coordination, GAO-12-151 (Washington, D.C.: Nov. 10, 2011), and Dodd-Frank Act 

Regulations: Agencies’ Efforts to Analyze and Coordinate Their Rules, GAO-13-101 

(Washington, D.C.: Dec. 18, 2012). 

Appendix I: Objectives, Scope, and 

Methodology 
Appendix I: Objectives, Scope, and 

Methodology

Page 68 GAO-14-67 Dodd-Frank Regulations

under the Administrative Procedure Act—and required the agencies to 

conduct some form of regulatory analysis.3 For each of the 59 rules, we 

reviewed final rule Federal Register releases to document and summarize 

the analyses conducted by the regulators under review. Using GAO’s 

Federal Rules database we found that 10 of the 59 rules were classified 

by the Office of Management and Budget (OMB), in consultation with the 

rulemaking agencies, as major rules under CRA (that is, have resulted in 

or are likely to result in an annual impact on the economy of $100 million 

or more, a major increase in costs or prices, or significant adverse effects 

on competition, employment, investment, productivity, innovation, or on 

the ability of U.S.-based enterprises to compete with foreign-based 

enterprises in domestic and export markets). For agencies subject to 

Executive Order 12,866 (E.O. 12,866), such major rules would be 

considered significant regulatory actions and subject to formal benefitcost analysis.4 We developed a data collection instrument to compare 

and assess the regulatory analysis conducted for the 10 major rules 

against the principles outlined in OMB Circular A-4, which provides 

guidance to federal agencies on the development of regulatory analysis.5

To conduct our analyses, we reviewed Federal Register releases of the 

proposed and final rules. To examine how OMB, in consultation with 

federal agencies, classifies rules as major, we reviewed CRA, GAO 

reports, and other material. Rather than limiting our scope to major rules 

effective from July 24, 2012, through July 22, 2013, we reviewed and 

analyzed all final Dodd-Frank rules classified as major as of July 22, 

2013. To identify such major rules, we relied on GAO’s Federal Rules 

database.6

 

3

The other 11 rules were technical amendments to previous rules, general statements of 

policy, interpretations, or guidance.

We identified 36 major rules issued pursuant to the Dodd4

CRA’s definition of a major rule is similar, but not identical, to the definition of a 

“significant regulatory action” under E.O. 12,866. 

5

As independent regulatory agencies that are not required to follow the economic analysis 

requirements of E.O. 12,866, the financial regulators also are not required to follow OMB 

Circular A-4. However, Circular A-4 is an example of best practices for agencies to follow 

when conducting regulatory analyses, and the financial regulators have told us that they 

follow the guidance in spirit. 

6

CRA requires agencies to file rules with Congress and the Comptroller General before 

the rules can become effective. 5 U.S.C. § 801(a)(1)(A). To compile information on all the 

rules submitted under CRA, GAO established a database and created a standardized 

submission form to allow more consistent information collection. The Federal Rules 

database is publicly available at www.gao.gov under Legal Decisions & Bid Protests. 
Appendix I: Objectives, Scope, and 

Methodology

Page 69 GAO-14-67 Dodd-Frank Regulations

Frank Act (which includes the 10 major rules mentioned above) and 

corroborated our list with federal agencies under review. To examine the 

basis for classifying the rules as major, we reviewed the impact analyses 

prepared by the agencies and provided to OMB, if available; GAO reports 

on major rules; and Federal Register releases on the rules. We also 

interviewed officials from OMB and federal agencies about the processes 

used to classify major rules.

To examine interagency coordination among the regulators, we reviewed 

the Dodd-Frank Act, Federal Register releases, and GAO reports to 

identify the interagency coordination or consultation requirements for the 

70 Dodd-Frank rules within our scope. We also interviewed officials or 

staff from the Commodity Futures Trading Commission (CFTC), CFPB, 

and the Securities and Exchange Commission (SEC) to identify which 

rules were subject to interagency coordination requirements under Titles 

VII and X of the act. We found evidence of coordination between the 

rulemaking agency and other regulators for 49 of the 70 regulations that 

we reviewed. We reviewed the Federal Register releases of the proposed 

and final rules and interviewed agency officials to document whether the 

agencies coordinated or consulted with other U.S., foreign, or

international regulators, as required by the Dodd-Frank Act or on a 

voluntary basis. To examine steps taken by CFPB to comply with the 

act’s interagency coordination and information-sharing requirements for 

its supervision activities, we reviewed the act; CFPB’s Supervision and 

Examination Manual, memorandums of understanding with federal and 

state regulators on interagency coordination, and other agency 

documents; and GAO reports. We also interviewed officials from CFPB 

and federal prudential regulators about their coordination with each other 

and coordination challenges.

Finally, we took a multipronged approach to analyze what is known about 

the impact of the Dodd-Frank Act on the financial marketplace. First, we 

used bank holding company data from the Federal Reserve Bank of 

Chicago (from FR Y-9C), Bureau of Economic Analysis, and Federal 

Reserve Board’s National Information Center, to update our indicators 

monitoring changes in certain characteristics of systemically important 

financial institutions (SIFI) that might be affected by Dodd-Frank 
Appendix I: Objectives, Scope, and 

Methodology

Page 70 GAO-14-67 Dodd-Frank Regulations

regulations.7

 

7

The Dodd-Frank Act does not use the term “systemically important financial institution” 

(SIFI). This term is commonly used by academics and other experts to refer to bank 

holding companies with $50 billion or more in total consolidated assets and nonbank 

financial companies designated by the Financial Stability Oversight Council (FSOC) for 

Federal Reserve supervision and enhanced prudential standards under the Dodd-Frank 

Act. For purposes of this report, we refer to these bank and nonbank financial companies 

as bank systemically important financial institutions (bank SIFIs) and nonbank 

systemically important financial institutions (nonbank SIFIs), respectively. We also refer to 

nonbank SIFIs and bank SIFIs collectively as SIFIs when appropriate. 

Although changes in the indicators may be suggestive of the 

impact of the act on SIFIs, the indicators have a number of limitations, 

including that they do not identify any causal linkages between the act 

and changes in the indicators. Moreover, factors other than the act affect 

SIFIs and, thus, the indicators. Second, we used the Federal Reserve 

Bank of Chicago data to update our economic analysis estimating 

changes in the (1) cost of credit provided by bank SIFIs and (2) safety 

and soundness of bank SIFIs. Our analysis does not differentiate the 

effects of the act from simultaneous changes in economic conditions or 

other factors that may affect such companies. Third, the Dodd-Frank Act 

requires CFTC, SEC, and the prudential regulators to implement new 

reforms for swaps and security-based swaps to reduce risk, increase 

transparency, and improve market integrity. For example, the act provides 

for the registration of swap dealers, including subjecting them to minimum 

margin requirements, and authorizes CFTC and SEC to impose 

mandatory clearing requirements on swaps. We developed margin and 

clearing indicators that may reflect the act’s impact on these activities 

using bank holding company data from the Federal Reserve Bank of 

Chicago (from FR Y-9C) and CFTC’s Swaps Report, respectively. As new 

data become available, we expect to update and, as warranted, revise 

our indicators and create additional indicators to cover other provisions. 

Although changes in our indicators may be suggestive of the act’s impact 

on the swaps market, the indicators have a number of limitations, 

including that they do not identify causal linkages between the act and 

changes in the indicators. Fourth, to assess agency plans to conduct 

retrospective reviews of their existing rules, we reviewed executive 

orders, including E.O. 13,579 that asks independent regulatory agencies 

to prepare retrospective review plans; OMB guidance; Federal Register

releases, policies, and other agency documents pertaining to 

retrospective reviews; and GAO reports. Finally, we interviewed federal 

financial regulators about their plans to conduct retrospective reviews of 

their Dodd-Frank rules. For parts of our methodology that involved the 
Appendix I: Objectives, Scope, and 

Methodology

Page 71 GAO-14-67 Dodd-Frank Regulations

analysis of computer-processed data, we assessed the reliability of these 

data and determined that they were sufficiently reliable for our purposes.

We conducted this performance audit from January 2013 to December 

2013 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.
Appendix II: Dodd-Frank Rules Effective as of 

July 22, 2013

Page 72 GAO-14-67 Dodd-Frank Regulations

The following table lists the Dodd-Frank rules that we identified as 

effective during the scope period for this review—July 24, 2012, through 

July 22, 2013.

Table 4: Dodd-Frank Rules Effective from July 24, 2012, through July 22, 2013

Agency stated it conducted analysis 

required under 

Rulemaking

Responsible 

regulator

Published 

date 

Effective 

datea

Regulatory 

Flexibility 

Act

Paperwork 

Reduction 

Act

Executive 

Order or 

statute

Electronic Fund Transfers (Regulation E) 

b

CFPB 2/7/2012 2/7/2013 Y Y Y 

Customer Clearing Documentation, Timing 

of Acceptance for Clearing, and Clearing 

Member Risk Management

CFTC 4/9/2012 10/1/2012 Y Y Y 

Guidance on the Effective Date of Section 

716 of the Dodd-Frank Wall Street Reform 

and Consumer Protection Act

FDIC, FRS, 

and OCC

5/10/2012 7/16/2013 N/A N/A N/A

Swap Data Recordkeeping and Reporting 

Requirements: Pre-Enactment and 

Transition Swaps

CFTC 6/12/2012 8/13/2012 Y Y Y 

Guidance on Due Diligence Requirements 

in Determining Whether Securities Are 

Eligible for Investment

OCC 6/13/2012 1/1/2013 N/A N/A N/A

Core Principles and Other Requirements 

for Designated Contract Markets

CFTC 6/19/2012 8/20/2012 Y Y Y 

Listing Standards for Compensation 

Committees

SEC 6/27/2012 7/27/2012 Y Y Y 

Confidential Treatment of Privileged 

Information

CFPB 7/5/2012 8/6/2012 Y N/A Y 

Process for Submissions for Review of 

Security-Based Swaps for Mandatory 

Clearing and Notice Filing Requirements for 

Clearing Agencies; Technical Amendments 

to Rule 19b–4 and Form 19b–4 Applicable 

to All Self-Regulatory Organizations

SEC 7/13/2012 8/13/2012 Y Y Y 

End-User Exception to the Clearing 

Requirement for Swaps

CFTC 7/19/2012 9/17/2012 Y Y Y 

Defining Larger Participants of the 

Consumer Reporting Market

CFPB 7/20/2012 9/30/2012 Y Y Y 

Swap Transaction Compliance and 

Implementation Schedule: Clearing 

Requirement Under Section 2(h) of the 

CEA

CFTC 7/30/2012 9/28/2012 Y Y Y 

Financial Market Utilities FRS 8/2/2012 9/14/2012 Y Y N/A

Debit Card Interchange Fees and Routing FRS 8/3/2012 10/1/2012 Y Y N/A

Appendix II: Dodd-Frank Rules Effective as 

of July 22, 2013
Appendix II: Dodd-Frank Rules Effective as of 

July 22, 2013

Page 73 GAO-14-67 Dodd-Frank Regulations

Agency stated it conducted analysis 

required under 

Rulemaking

Responsible 

regulator

Published 

date 

Effective 

datea

Regulatory 

Flexibility 

Act

Paperwork 

Reduction 

Act

Executive 

Order or 

statute

Further Definition of ‘‘Swap,’’ ‘‘SecurityBased Swap,’’ and ‘‘Security-Based Swap 

Agreement’’; Mixed Swaps; Security-Based 

Swap Agreement Recordkeeping 

b

CFTC and 

SEC 

8/13/2012 10/12/2012 Y Y Y 

Electronic Fund Transfers (Regulation E) CFPB 8/20/2012 2/7/2013 Y Y Y 

Registration of Intermediaries CFTC 8/28/2012 10/29/2012 Y Y Y 

Risk-Based Capital Guidelines: Market Risk FDIC, FRS, 

and OCC

8/30/2012 1/1/2013 Y Y N/A

Amendments to Commodity Pool Operator 

and Commodity Trading Advisor 

Regulations Resulting From the DoddFrank Act

CFTC 9/5/2012 11/5/2012 Y Y Y 

Confirmation, Portfolio Reconciliation, 

Portfolio Compression, and Swap Trading 

Relationship Documentation Requirements 

for Swap Dealers and Major Swap 

Participants

CFTC 9/11/2012 11/13/2012 Y Y Y 

Conflict Minerals SEC 9/12/2012 11/13/2012 Y Y Y 

Disclosure of Payments by Resource 

Extraction Issuersc

SEC 9/12/2012 11/13/2012 Y Y Y 

Annual Stress Test OCC 10/9/2012 10/9/2012 Y Y N/A

Supervisory and Company-Run Stress Test 

Requirements for Covered Companies

FRS 10/12/2012 11/15/2012 Y Y N/A

Annual Company-Run Stress Test 

Requirements for Banking Organizations 

With Total Consolidated Assets Over $10 

Billion Other Than Covered Companies

FRS 10/12/2012 11/15/2012 Y Y N/A

Annual Stress Test FDIC 10/15/2012 10/15/2012 Y Y N/A

Enforcement of Subsidiary and Affiliate 

Contracts by the FDIC as Receiver of a 

Covered Financial Company

FDIC 10/16/2012 11/15/2012 Y Y N/A

Swap Data Repositories: Interpretative 

Statement Regarding the Confidentiality 

and Indemnification Provisions of the 

Commodity Exchange Act 

CFTC 10/25/2012 10/25/2012 N/A N/A N/A

Assessments, Large Bank Pricing FDIC 10/31/2012 4/1/2013 Y Y N/A

Defining Larger Participants of the 

Consumer Debt Collection Market 

CFPB 10/31/2012 1/2/2013 Y Y Y 

Clearing Agency Standards SEC 11/2/2012 1/2/2013 Y Y Y 

Adaptation of Regulations To Incorporate 

Swaps 

CFTC 11/2/2012 1/2/2013 Y Y Y 
Appendix II: Dodd-Frank Rules Effective as of 

July 22, 2013

Page 74 GAO-14-67 Dodd-Frank Regulations

Agency stated it conducted analysis 

required under 

Rulemaking

Responsible 

regulator

Published 

date 

Effective 

datea

Regulatory 

Flexibility 

Act

Paperwork 

Reduction 

Act

Executive 

Order or 

statute

Determination of Foreign Exchange Swaps 

and Foreign Exchange Forwards Under the 

Commodity Exchange Act 

b

Treasury 11/20/2012 11/20/2012 Y Y Y 

Truth in Lending (Regulation Z) CFPB and 

FRS

d 11/21/2012 1/1/2013 N/A Y N/A

Consumer Leasing (Regulation M) CFPB and 

FRS

d 11/21/2012 1/1/2013 N/A Y N/A

Truth in Lending (Regulation Z) CFPB 11/21/2012 1/1/2013 N/A N/A N/A

Purchase of Certain Debt Securities by 

Business and Industrial Development 

Companies Relying on an Investment 

Company Act Exemption

SEC 11/23/2012 12/24/2012 Y Y Y 

Delayed Implementation of Certain New 

Mortgage Disclosures

CFPB 11/23/2012 11/23/2012 Y Y Y 

Alternatives to the Use of Credit Ratings NCUA 12/13/2012 6/11/2013 Y Y N/A

Clearing Requirement Determination Under 

Section 2(h) of the CEA

CFTC 12/13/2012 2/11/2013 Y Y Y 

Community Reinvestment Act Regulations FDIC, FRS, 

and OCC

d 12/21/2012 1/1/2013 N/A Y N/A

Adaptation of Regulations To Incorporate 

Swaps—Records of Transactions

CFTC 12/21/2012 2/19/2013 Y Y Y 

Lending Limits OCC d 12/31/2012 12/31/2012 N/A Y N/A

Final Exemptive Order Regarding 

Compliance with Certain Swap Regulations

CFTC 1/7/2013 12/21/2012 N/A Y Y 

Transition Period Under Section 716 of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act

OCC 1/8/2013 1/8/2013 N/A N/A N/A

Treasury Tax and Loan Depositaries; 

Depositaries and Financial Agents of the 

Government 

NCUA 1/18/2013 1/18/2013 Y Y N/A

Escrow Requirements Under the Truth in 

Lending Act (Regulation Z)

CFPB 1/22/2013 6/1/2013 Y Y Y 

Lost Securityholders and Unresponsive 

Payees

SEC 1/23/2013 3/25/2013 Y Y Y 

Loan Originator Compensation 

Requirements Under the Truth in Lending 

Act (Regulation Z)

CFPB 2/15/2013 6/1/2013 Y Y Y 

Disclosure of Records and Information CFPB 2/15/2013 3/18/2013 Y Y Y 

Disclosures at Automated Teller Machines 

(Regulation E)

CFPB 3/26/2013 3/26/2013 N/A Y Y 
Appendix II: Dodd-Frank Rules Effective as of 

July 22, 2013

Page 75 GAO-14-67 Dodd-Frank Regulations

Agency stated it conducted analysis 

required under 

Rulemaking

Responsible 

regulator

Published 

date 

Effective 

datea

Regulatory 

Flexibility 

Act

Paperwork 

Reduction 

Act

Executive 

Order or 

statute

Truth in Lending (Regulation Z)

b

CFPB 3/28/2013 3/28/2013 Y Y Y 

Final Order in Response to a Petition From 

Certain Independent System Operators and 

Regional Transmission Organizations To 

Exempt Specified Transactions Authorized 

by a Tariff or Protocol Approved by the 

Federal Energy Regulatory Commission or 

the Public Utility Commission of Texas 

From Certain Provisions of the Commodity 

Exchange Act Pursuant to the Authority 

Provided in the Act 

CFTC 4/2/2013 4/2/2013 Y Y Y 

Order Exempting, Pursuant to Authority of 

the Commodity Exchange Act, Certain 

Transactions Between Entities Described in 

the Federal Power Act, and Other Electric 

Cooperatives 

CFTC 4/2/2013 4/2/2013 Y Y Y 

Definitions of ‘‘Predominantly Engaged In 

Financial Activities’’ and ‘‘Significant’’

Nonbank Financial Company and Bank 

Holding Company 

FRS 4/5/2013 5/6/2013 Y Y N/A

Dual and Multiple Associations of Persons 

Associated With Swap Dealers, Major 

Swap Participants and Other Commission 

Registrants 

CFTC 4/8/2013 6/7/2013 Y Y Y 

Retail Foreign Exchange Transactions 

(Regulation NN)

FRS 4/9/2013 5/13/2013 Y Y N/A

Disclosure of Consumer Complaint Data CFPB 4/10/2013 3/25/2013 N/A N/A N/A

Clearing Exemption for Swaps Between 

Certain Affiliated Entities 

CFTC 4/11/2013 6/10/2013 Y Y Y 

Identity Theft Red Flags Rules CFTC and 

SEC 

4/19/2013 5/20/2013 Y Y Y 

Truth in Lending (Regulation Z) CFPB 5/3/2013 5/3/2013 Y Y Y 

Consumer Financial Civil Penalty Fund CFPB 5/7/2013 5/7/2013 N/A Y Y 

Amendments to the 2013 Escrows Final 

Rule under the Truth in Lending Act 

(Regulation Z)

CFPB 5/23/2013 6/1/2013 Y Y Y 

Antidisruptive Practices Authority CFTC 5/28/2013 5/28/2013 N/A N/A N/A

Technical Amendments NCUA 5/31/2013 5/31/2013 Y Y N/A

Loan Originator Compensation 

Requirements Under the Truth in Lending 

Act (Regulation Z); Prohibition on Financing 

Credit Insurance Premiums; Delay of 

Effective Date 

CFPB 5/31/2013 6/1/2013 Y Y Y 
Appendix II: Dodd-Frank Rules Effective as of 

July 22, 2013

Page 76 GAO-14-67 Dodd-Frank Regulations

Agency stated it conducted analysis 

required under 

Rulemaking

Responsible 

regulator

Published 

date 

Effective 

datea

Regulatory 

Flexibility 

Act

Paperwork 

Reduction 

Act

Executive 

Order or 

statute

Definition of ‘‘Predominantly Engaged in 

Activities That Are Financial in Nature or 

Incidental Thereto’’ 

b

FDIC 6/10/2013 7/10/2013 Y Y N/A

Lending Limits OCC 6/25/2013 6/25/2013 Y Y N/A

Retail Foreign Exchange Transactions SEC 7/16/2013 7/16/2013 Y Y Y 

Rescission of Supervised Investment Bank 

Holding Company Rules

SEC 7/18/2013 7/18/2013 N/A Y Y 

Source: Dodd-Frank Act, Federal Register, and other documents from regulators.

a

To determine our scope for this review, we considered the earliest effective date shown in the final 

Federal Register releases for each Dodd-Frank rulemaking. If the effective date shown fell within our 

scope, the rule was included even if subsequent rulemakings changed the effective date of the rule.

b

Executive Order 12,866 requires executive agencies, like the Department of the Treasury, to the 

extent permitted by law and where applicable, to (1) assess benefits and costs of available regulatory 

alternatives and (2) include both quantifiable and qualitative measures of benefits and costs in their 

analysis. Additionally, CFTC, CFPB, and SEC each have requirements for conducting economic 

analyses of their rules under their own organic statutes. First, CFTC, under section 15(a) of the 

Commodity Exchange Act, is required to consider the benefits and costs of its action before 

promulgating a regulation under the Commodity Exchange Act or issuing certain orders. Second, 

CFPB, under the Consumer Financial Protection Act (Title X of the Dodd-Frank Act), must consider 

the potential benefits and costs of its rules for consumers and entities that offer or provide consumer 

financial products and services. Third, under the Securities Act, the Securities Exchange Act, the

Investment Advisers Act, and the Investment Company Act, SEC must consider whether a rule will 

promote efficiency, competition, and capital formation whenever it is engaged in rulemaking and is 

required to consider or determine whether an action is necessary or appropriate in the public interest. 

Under the Securities Exchange Act, SEC also must not adopt a rule that would impose a burden on 

competition not necessary or appropriate in furtherance of the purposes of the act.

c

This rule is no longer in effect because it was vacated by a decision of the U.S. District Court for the 

District of Columbia on July 2, 2013. See American Petroleum Institute et al. v. SEC, —- F.Supp.2d 

—-, 2013 WL 3307114 (D.D.C. 2013).

d

Note: In this report, we use the terms “rules,” “regulations,” or “rulemakings” generally to refer to 

Federal Register notices of agency action pursuant to the Dodd-Frank Act, including regulations, 

interpretive rules, general statements of policy, guidance, and rules that deal with agency 

organization, procedure, or practice. Combined with our past two reports, we have reviewed all DoddFrank Act rules in effect as of July 22, 2013. See GAO, Dodd-Frank Act Regulations: Implementation 

Could Benefit from Additional Analyses and Coordination, 

We did not consider a rule “substantive” for purposes of this report if the agency (1) stated the rule 

did not require notice and comment; (2) did not conduct analysis of benefits or costs; and (3) 

concluded, per PRA, that the rule did not impose new information collection requirements or 

substantively or materially revise existing collections of information.

GAO-12-151 (Washington, D.C.: Nov. 10, 

2011), and Dodd-Frank Act Regulations: Agencies’ Efforts to Analyze and Coordinate Their Rules, 

GAO-13-101 (Washington, D.C.: Dec. 18, 2012)

The following table lists the Dodd-Frank rules that we identified as final 

and effective during the scope period for our November 2012 review—

July 22, 2011, through July 23, 2012.
Appendix II: Dodd-Frank Rules Effective as of 

July 22, 2013

Page 77 GAO-14-67 Dodd-Frank Regulations

Table 5: Dodd-Frank Rules Effective from July 22, 2011, through July 23, 2012

Rulemaking 

Responsible 

regulator

Effective 

date 

Did regulator 

identify the 

rule as having 

significant 

economic 

impact? 

Did regulator 

quantify 

costs of final 

rule other 

than PRA 

costs? 

Did regulator 

quantify 

benefits of 

final rule? 

Did regulator 

qualitatively 

identify costs 

of final rule? 

Did regulator 

qualitatively 

identify 

benefits of 

final rule? 

Risk-Based Capital 

Standards: Advanced 

Capital Adequacy 

Framework—Basel II; 

Establishment of a 

Risk-Based Capital 

Floor 

FDIC, Federal 

Reserve, and 

OCC

07/28/11 No No No a Yes Yes

Securities 

Whistleblower 

Incentives and 

Protections 

SEC 08/12/11 Yes No No Yes Yes

Prohibition on the 

Employment, or 

Attempted 

Employment, of 

Manipulative and 

Deceptive Devices and 

Prohibition on Price 

Manipulation 

CFTC 08/15/11 No No No Yes Yes

Fair Credit Reporting 

Risk-Based Pricing 

Regulations 

Federal 

Reserve and 

Federal Trade 

Commission

08/15/11 No No No Yes Yes

Equal Credit 

Opportunity 

Federal 

Reserve

08/15/11 No No No Yes Yes

Certain Orderly 

Liquidation Authority 

Provisions under Title II 

of the Dodd-Frank Wall 

Street Reform and 

Consumer Protection 

Act 

FDIC 08/15/11 No No No No Yes
Appendix II: Dodd-Frank Rules Effective as of 

July 22, 2013

Page 78 GAO-14-67 Dodd-Frank Regulations

Rulemaking 

Responsible 

regulator

Effective 

date 

Did regulator 

identify the 

rule as having 

significant 

economic 

impact? 

Did regulator 

quantify 

costs of final 

rule other 

than PRA 

costs? 

Did regulator 

quantify 

benefits of 

final rule? 

Did regulator 

qualitatively 

identify costs 

of final rule? 

Did regulator 

qualitatively 

identify 

benefits of 

final rule? 

Public Company 

Accounting Oversight 

Board; Order Approving 

Proposed Board 

Funding Final Rules for 

Allocation of the 

Board’s Accounting 

Support Fee Among 

Issuers, Brokers, and 

Dealers, and Other 

Amendments to the 

Board’s Funding Rules 

SEC 08/18/11 N/A N/A N/A N/A N/A

Authority to Designate 

Financial Market 

Utilities (FMU) as 

Systemically Important 

FSOC 08/26/11 No No No Yes Yes

Family Offices SEC 08/29/11 Yes Yes Yes Yes Yes

Security Ratings SEC 09/02/11; 

12/31/12

No No No Yes Yes

Agricultural Commodity 

Definition 

CFTC 09/12/11 No No No Yes Yes

Retail Foreign 

Exchange 

Transactions; 

Conforming Changes to 

Existing Regulations in 

Response to the DoddFrank Wall Street 

Reform and Consumer 

Protection Act 

CFTC 09/12/11 No No No Yes Yes

Rules Implementing 

Amendments to the 

Investment Advisers 

Act of 1940 

SEC 07/21/11;

09/19/11

Yes Yes Yes Yes Yes

Privacy of Consumer 

Financial Information; 

Conforming 

Amendments Under 

Dodd-Frank Act 

CFTC 09/20/11 No No No Yes Yes

Large Trader Reporting 

for Physical Commodity 

Swaps 

CFTC 09/20/11 No No No Yes Yes
Appendix II: Dodd-Frank Rules Effective as of 

July 22, 2013

Page 79 GAO-14-67 Dodd-Frank Regulations

Rulemaking 

Responsible 

regulator

Effective 

date 

Did regulator 

identify the 

rule as having 

significant 

economic 

impact? 

Did regulator 

quantify 

costs of final 

rule other 

than PRA 

costs? 

Did regulator 

quantify 

benefits of 

final rule? 

Did regulator 

qualitatively 

identify costs 

of final rule? 

Did regulator 

qualitatively 

identify 

benefits of 

final rule? 

Business Affiliate 

Marketing and Disposal 

of Consumer 

Information Rules 

CFTC 09/20/11 No b No No Yes Yes

Suspension of the duty 

to file reports for 

classes of assetbacked securities 

SEC 09/22/11 No No No Yes Yes

Removing Any 

Reference to or 

Reliance on Credit 

Ratings in Commission 

Regulations; Proposing 

Alternatives to the Use 

of Credit Ratings 

CFTC 09/23/11 No No No Yes Yes

Process for Review of 

Swaps for Mandatory 

Clearing 

CFTC 09/26/11 No No No Yes Yes

Provisions Common to 

Registered Entities 

CFTC 09/26/11 No No No Yes Yes

Debit Card Interchange 

Fees and Routing 

Federal 

Reserve

10/01/11 Yes b No No Yes Yes

Whistleblower 

Incentives and 

Protection 

CFTC 10/24/11 Yes No No Yes Yes

Swap Data 

Repositories: 

Registration Standards, 

Duties and Core 

Principles 

CFTC 10/31/11 Yes Yes No Yes Yes

Disclosure of 

Information; Privacy Act 

Regulations; Notice and 

Amendments 

FDIC 11/14/11 N/A N/A N/A N/A N/A

Resolution Plans 

Required 

Federal 

Reserve and 

FDIC

11/30/11 No No No Yes Yes

Remittance Transfers NCUA 11/30/11 No No No No No

Amendment to July 14, 

2011 Order for Swap 

Regulation 

CFTC 12/23/11 No No No No Yes

Capital Plans Federal 

Reserve

12/30/11 No No No Yes No
Appendix II: Dodd-Frank Rules Effective as of 

July 22, 2013

Page 80 GAO-14-67 Dodd-Frank Regulations

Rulemaking 

Responsible 

regulator

Effective 

date 

Did regulator 

identify the 

rule as having 

significant 

economic 

impact? 

Did regulator 

quantify 

costs of final 

rule other 

than PRA 

costs? 

Did regulator 

quantify 

benefits of 

final rule? 

Did regulator 

qualitatively 

identify costs 

of final rule? 

Did regulator 

qualitatively 

identify 

benefits of 

final rule? 

Agricultural Swaps Rule CFTC 12/31/11 No No No Yes Yes

Derivatives Clearing 

Organization General 

Provisions and Core 

Principles 

CFTC 01/09/12 Yes Yes No Yes Yes

Position Limits for 

Futures and Swaps 

CFTC 01/17/12 Yes Yes No Yes Yes

Performance of 

Registration Functions 

by National Futures 

Association with 

Respect to Swap 

Dealers and Major 

Swap Participants 

CFTC 01/19/12 N/A N/A N/A N/A N/A

Mine Safety Disclosure SEC 01/27/12 No No No Yes Yes

Reporting Line for the 

Commission’s Inspector 

General 

SEC 02/14/12 N/A N/A N/A N/A N/A

Investment of Customer 

Funds and Funds Held 

in an Account for 

Foreign Futures and 

Foreign Options 

Transactions 

CFTC 02/17/12 Yes No No Yes Yes

Registration of Foreign 

Boards of Trade 

CFTC 02/21/12 No Yes No Yes Yes

Net Worth Standard for 

Accredited Investors 

SEC 02/27/12 Yes No No Yes Yes

Real-Time Reporting of 

Swap Transaction Data 

CFTC 03/09/12 Yes No No Yes Yes

Swap Data 

Recordkeeping and 

Reporting 

Requirements 

CFTC 03/13/12 Yes No No Yes Yes

Registration of Swap 

Dealers and Major 

Swap Participants 

CFTC 03/19/12 No Yes No Yes Yes
Appendix II: Dodd-Frank Rules Effective as of 

July 22, 2013

Page 81 GAO-14-67 Dodd-Frank Regulations

Rulemaking 

Responsible 

regulator

Effective 

date 

Did regulator 

identify the 

rule as having 

significant 

economic 

impact? 

Did regulator 

quantify 

costs of final 

rule other 

than PRA 

costs? 

Did regulator 

quantify 

benefits of 

final rule? 

Did regulator 

qualitatively 

identify costs 

of final rule? 

Did regulator 

qualitatively 

identify 

benefits of 

final rule? 

Reporting by 

Investment Advisers to 

Private Funds and 

Certain Commodity 

Pool Operators and 

Commodity Trading 

Advisors on Form PF 

SEC and 

CFTC

03/31/12 Yes No No Yes Yes

Resolution Plans 

Required for Insured 

Depository Institutions 

With $50 Billion or More 

in Total Assets 

FDIC 04/01/12 No No No Yes Yes

Protection of Cleared 

Swaps Customer 

Contracts and 

Collateral; Conforming 

Amendments to the 

Commodity Broker 

Bankruptcy Provisions 

CFTC 04/09/12 Yes No No Yes Yes

Exemptions for 

Security-Based Swaps 

Issued by Certain 

Clearing Agencies 

SEC 04/16/12 No No No Yes Yes

Business Conduct 

Standards for Swap 

Dealers and Major 

Swap Participants 

CFTC 04/17/12 Yes No No Yes Yes

Commodity Pool 

Operators and 

Commodity Trading 

Advisers: Compliance 

Obligations 

CFTC 04/24/12; 

07/02/12

No Yes No Yes Yes

Authority To Require 

Supervision and 

Regulation of Certain 

Nonbank Financial 

Companies 

FSOC 05/11/12 No No No No Yes

Implementation of the 

Freedom of Information 

Act 

FSOC 05/11/12 No No No Yes No

Investment Advisor 

Performance 

Compensation Rule 

SEC 05/22/12 Yes Yes Yes Yes Yes
Appendix II: Dodd-Frank Rules Effective as of 

July 22, 2013

Page 82 GAO-14-67 Dodd-Frank Regulations

Rulemaking 

Responsible 

regulator

Effective 

date 

Did regulator 

identify the 

rule as having 

significant 

economic 

impact? 

Did regulator 

quantify 

costs of final 

rule other 

than PRA 

costs? 

Did regulator 

quantify 

benefits of 

final rule? 

Did regulator 

qualitatively 

identify costs 

of final rule? 

Did regulator 

qualitatively 

identify 

benefits of 

final rule? 

Mutual Insurance 

Holding Company 

Treated as Insurance 

Company 

FDIC 05/30/12 No No No No No

Swap Dealer and Major 

Swap Participant 

Recordkeeping, 

Reporting, and Duties 

Rules; Futures 

Commission Merchant 

and Introducing Broker 

Conflicts of Interest 

Rules; and Chief 

Compliance Officer 

Rules for Swap 

Dealers, Major Swap 

Participants, and 

Futures Commission 

Merchants 

CFTC 06/04/12 Yes Yes No Yes Yes

Statement of Policy 

Regarding the 

Conformance Period for 

Entities Engaged in 

Prohibited Proprietary 

Trading or Private 

Equity Fund or Hedge 

Fund Activities 

Federal 

Reserve

06/08/12 N/A N/A N/A N/A N/A

Commodity Options CFTC 06/26/12 No No No Yes Yes

State Official 

Notification Rule 

CFPB 06/29/12 N/A N/A N/A N/A N/A

Rules Relating to 

Investigations 

CFPB 06/29/12 N/A N/A N/A N/A N/A

Rules of Practice for 

Adjudication 

Proceedings 

CFPB 06/29/12 N/A N/A N/A N/A N/A

Collection of Checks 

and Other Items by 

Federal Reserve Banks 

and Funds Transfers 

Through Fedwire: 

Elimination of ‘‘As-of 

Adjustments’’ and 

Other Clarifications 

Federal 

Reserve

07/12/12 No No No Yes Yes
Appendix II: Dodd-Frank Rules Effective as of 

July 22, 2013

Page 83 GAO-14-67 Dodd-Frank Regulations

Rulemaking 

Responsible 

regulator

Effective 

date 

Did regulator 

identify the 

rule as having 

significant 

economic 

impact? 

Did regulator 

quantify 

costs of final 

rule other 

than PRA 

costs? 

Did regulator 

quantify 

benefits of 

final rule? 

Did regulator 

qualitatively 

identify costs 

of final rule? 

Did regulator 

qualitatively 

identify 

benefits of 

final rule? 

Assessment of Fees on 

Large Bank Holding 

Companies and 

Nonbank Financial 

Companies Supervised 

by the Federal Reserve 

Board To Cover the 

Expenses of the 

Financial Research 

Fund 

Treasury 07/20/12 Yes Yes No Yes Yes 

Supervised Securities 

Holding Company 

Registration 

Federal 

Reserve 

07/20/12 No No No No No 

Alternatives to the Use 

of External Credit 

Ratings in the 

Regulations of the OCC 

OCC 07/21/12; 

01/01/13 

No Noa No No No 

Permissible 

Investments for Federal 

and State Savings 

Associations: Corporate 

Debt Securities 

FDIC 07/21/12 No No No Yes No 

Guidance on Due 

Diligence Requirements 

for Savings 

Associations in 

Determining Whether a 

Corporate Debt 

Security Is Eligible for 

Investment 

FDIC 07/21/12 N/A N/A N/A N/A N/A 

Guidance on Due 

Diligence Requirements 

in Determining Whether 

Securities Are Eligible 

for Investment 

OCC 01/01/13 N/A c N/A N/A N/A N/A 

Supervisory Guidance 

on Stress Testing for 

Banking Organizations 

With More Than $10 

Billion in Total 

Consolidated Assets 

FDIC, Federal 

Reserve, and 

OCC 

07/23/12 N/A N/Aa

 N/A N/A N/A 

Calculation of 

Maximum Obligation 

Limitation 

FDIC and 

Treasury 

07/23/12 No No No No No 
Appendix II: Dodd-Frank Rules Effective as of 

July 22, 2013

Page 84 GAO-14-67 Dodd-Frank Regulations

Rulemaking 

Responsible 

regulator

Effective 

date 

Did regulator 

identify the 

rule as having 

significant 

economic 

impact? 

Did regulator 

quantify 

costs of final 

rule other 

than PRA 

costs? 

Did regulator 

quantify 

benefits of 

final rule? 

Did regulator 

qualitatively 

identify costs 

of final rule? 

Did regulator 

qualitatively 

identify 

benefits of 

final rule? 

Further Definition of 

“Swap Dealer,” 

“Security-Based Swap 

Dealer,” “Major Swap 

Participant,” “Major 

Security-Based Swap 

Participant,” and 

“Eligible Contract 

Participant” 

CFTC and 

SEC 

07/23/12; 

12/31/12 

Yes Yes No Yes Yes 

Source: GAO summary of information from the Federal Register, the Federal Reserve Bank of St. Louis 

(http://www.stlouisfed.org/regreformrules/final.aspx) and Davis Polk & Wardwell LLP.

Note: N/A refers to those rulemakings related to interpretive rules, general statements of policy, and 

rules that deal with agency organization, procedure, or practice, and thus not subject to 

Administrative Procedure Act requirements.

a

OCC undertook an assessment of these rules, which included quantified total cost estimates, but the 

assessments were not published in the Federal Register notices.

b

Compliance dates vary.

c

The following table lists the Dodd-Frank rules that we identified as final 

and effective during the scope period for our November 2011 review—

July 21, 2010, through July 21, 2011.

OCC’s guidance is included in this review, even though the effective date is outside our scope 

period, because the accompanying rule and similar FDIC guidance are included in this review.

Table 6: Dodd-Frank Rules Effective as of July 21, 2011

Rulemaking

Responsible 

regulator Effective date

Did the 

regulator have 

some level of 

discretion?

Did the regulator 

identify the rule as 

having significant 

economic impact?

Deposit Insurance Regulations; Permanent Increase 

in Standard Coverage Amount; Advertisement of 

Membership; International Banking; Foreign Banks 

(75 Fed. Reg. 49,363) 

FDIC 8/13/2010 No No

Display of Official Sign; Permanent Increase in 

Standard Maximum Share (75 Fed. Reg. 53,841) 

NCUA 9/2/2010 No No

Internal Controls over Financial Reporting in 

Exchange Act Periodic Reports (75 Fed. Reg. 

57,385) 

SEC 9/21/2010 No No

Commission Guidance Regarding Auditing, 

Attestation, and Related Professional Practice 

Standards Related to Brokers and Dealers (75 Fed. 

Reg. 60,616) 

SEC 10/1/2010 N/A N/A
Appendix II: Dodd-Frank Rules Effective as of 

July 22, 2013

Page 85 GAO-14-67 Dodd-Frank Regulations

Rulemaking

Responsible 

regulator Effective date

Did the 

regulator have 

some level of 

discretion?

Did the regulator 

identify the rule as 

having significant 

economic impact?

Removal from Regulation FD of the Exemption for 

Credit Rating Agencies (75 Fed. Reg. 61,050) 

SEC 10/4/2010 No No

Regulation of Off-Exchange Retail Foreign 

Exchange Transactions and Intermediaries (75 Fed. 

Reg. 55,410) 

CFTC 10/18/2010 Yes No

Deposit Insurance Regulations: Unlimited Coverage 

for Noninterest-Bearing Transaction Accounts (75 

Fed. Reg. 69,577) 

FDIC 12/31/2010 No No

Designated Reserve Ratio (75 Fed. Reg. 79,286) FDIC 1/1/2011 Yes No

Rules of Practice – Handling of Proposed Rule

Changes Submitted by Self-Regulatory 

Organizations (76 Fed. Reg. 4066) 

SEC 1/24/2011 N/A N/A

Deposit Insurance Regulations; Unlimited Coverage 

for Noninterest-Bearing Transaction Accounts; 

Inclusion of Interest on Lawyers Trust Accounts (76 

Fed. Reg. 4813) 

FDIC 1/27/2011 No No

Issuer Review of Assets in Offerings of Asset-Back 

Securities (76 Fed. Reg. 4231) 

SEC 3/28/2011 Yes Yes

Disclosure for Asset-Backed Securities Required by 

Section 943 of the Dodd-Frank Wall Street Reform 

and Consumer Protection Act (76 Fed. Reg. 4489) 

SEC 3/28/2011 Yes Yes

Conformance Period for Entities Engaged in 

Prohibited Proprietary Trading or Private Equity 

Fund or Hedge Fund Activities (76 Fed. Reg. 8265) 

Federal Reserve 4/1/2011 Yes No

Assessments, Large Bank Pricing (76 Fed. Reg. 

10,672) 

FDIC 4/1/2011 Yes No

Higher Rate Threshold for Escrow Requirements (76 

Fed. Reg. 11,319) 

Federal Reserve 4/1/2011 No No

Shareholder Approval of Executive Compensation 

and Golden Parachute Compensation (76 Fed. Reg. 

6010) 

SEC 4/4/2011 Yes Yes

Establishment of the FDIC Systemic Resolution 

Advisory Committee (76 Fed. Reg. 25,352) 

FDIC 4/28/2011 N/A N/A

Order Directing Funding for the Governmental 

Accounting Standards Board (76 Fed. Reg. 28,247) 

SEC 5/16/2011 N/A N/A

Share Insurance and Appendix (76 Fed. Reg. 

30,250) 

NCUA 6/24/2011 No No

Modification of Treasury Regulations Pursuant to 

Section 939A of the Dodd- Frank Wall Street Reform 

and Consumer Protection Act (76 Fed. Reg. 39,278) 

Treasury 7/6/2011 No No

Retail Foreign Exchange Transactions (76 Fed. Reg. 

40,779) 

FDIC 7/15/2011 Yes No
Appendix II: Dodd-Frank Rules Effective as of 

July 22, 2013

Page 86 GAO-14-67 Dodd-Frank Regulations

Rulemaking

Responsible 

regulator Effective date

Did the 

regulator have 

some level of 

discretion?

Did the regulator 

identify the rule as 

having significant 

economic impact?

Retail Foreign Exchange Transactions (76 Fed. Reg. 

41,375) 

OCC 7/15/2011 Yes No

Beneficial Ownership Reporting Requirements and 

Security-Based Swaps (76 Fed. Reg. 34,579) 

SEC 7/16/2011 Yes No

Prohibition Against Payment of Interest on Demand 

Deposits (76 Fed. Reg. 42,015) 

Federal Reserve 7/21/2011 No No

List of OTS Regulations to be Enforced by the OCC 

and FDIC Pursuant to the Dodd-Frank Act (76 Fed. 

Reg. 39,246) 

OCC/FDIC 7/21/2011 N/A N/A

Office of Thrift Supervision Integration; Dodd-Frank 

Act Implementation (76 Fed. Reg. 43,549) 

OCC 7/21/2011 N/A N/A

Exemptions for Advisers to Venture Capital Funds, 

Private Fund Advisers With Less Than $150 Million 

in Assets Under Management, and Foreign Private 

Advisers (76 Fed. Reg. 39,646) 

SEC 7/21/2011 Yes No

Consumer Transfer Protection Date (75 Fed. Reg. 

57,252) 

CFPB 7/21/2011 N/A N/A

Identification of Enforceable Rules and Orders (76 

Fed. Reg. 43,569) 

CFPB 7/21/2011 N/A N/A

Consumer Leasing – Exempt Consumer Credit 

under Regulation M (75 Fed. Reg. 18,349) 

Federal Reserve 7/21/2011 No No

Truth in Lending – Exempt Consumer Credit under 

Regulation Z (76 Fed. Reg. 18,354) 

Federal Reserve 7/21/2011 No No

Interest on Deposits; Deposit Insurance Coverage 

(76 Fed. Reg. 41,392) 

FDIC 7/21/2011 No No

Source: GAO summary of information from the Federal Register and Federal Reserve Bank of St. Louis 

(http://www.stlouisfed.org/regreformrules/final.aspx).

Note: N/A refers to those rulemakings related to interpretive rules, general statements of policy, and 

rules that deal with agency organization, procedure, or practice, and thus not subject to 

Administrative Procedure Act requirements. In some instances, we found that an agency had 

discretion to implement the statute, even though the discretion was limited, because the exercise of 

discretion was important to implementation.
Appendix III: Dodd-Frank Rules Classified as 

Major, Final as of July 22, 2013

Page 87 GAO-14-67 Dodd-Frank Regulations

The following table lists the Dodd-Frank rules that have been designated 

as major by OMB and are final as of July 22, 2013.

Table 7: Dodd-Frank Rules Classified as Major, Final as of July 22, 2013

Rulemaking 

Responsible 

regulator Published date Effective date

Issuer Review of Assets in Offerings of Asset-Backed Securities SEC 1/25/2011 3/28/2011

Disclosure for Asset-Backed Securities SEC 1/26/2011 3/28/2011

Shareholder Approval of Executive Compensation and Golden Parachute 

Compensation

SEC 2/2/2011 4/4/2011

Securities Whistleblower Incentives and Protections SEC 6/13/2011 8/12/2011

Family Offices SEC 6/29/2011 8/29/2011

Rules Implementing Amendments to the Investment Advisers Act of 1940 SEC 7/19/2011 7/21/2011

Debit Card Interchange Fees and Routing FRS 7/20/2011 10/1/2011

Whistleblower Incentives and Protection CFTC 8/25/2011 10/24/2011

Swap Data Repositories: Registration Standards Duties and Core Principles CFTC 9/1/2011 10/31/2011

Derivatives Clearing Organization General Provisions and Core Principles CFTC 11/8/2011 1/9/2012

Reporting by Investment Advisers to Private Funds and Certain Commodity 

Pool Operators and Commodity Trading Advisors on Form PF

CFTC and SEC 11/16/2011 3/31/2012

Positions Limits for Futures and Swaps CFTC 11/18/2011 1/17/2012

Investment of Customer Funds and Funds Held in and Account for Foreign 

Futures and Foreign Options Transactions

CFTC 12/19/2011 2/17/2012

Net Worth Standard for Accredited Investors SEC 12/29/2011 2/27/2012

Real-time Public Reporting of Swap Transaction Data CFTC 1/9/2012 3/9/2012

Swap Data Recordkeeping and Reporting Requirements CFTC 1/13/2012 3/13/2012

Protection of Cleared Swaps Customer Contracts and Collateral; Conforming 

Amendments to the Commodity Broker Bankruptcy Provisions

CFTC 2/7/2012 4/9/2012

Electronic Fund Transfers (Regulation E) CFPB 2/7/2012 2/7/2013

Business Conduct Standards for Swap Dealers and Major Swap Participants 

with Counterparties

CFTC 2/17/2012 4/17/2012

Investment Advisor Performance Compensation SEC 2/22/2012 5/22/2012

Swap Dealer and Major Swap Participant Recordkeeping, Reporting, and 

Duties Rules; Futures Commission Merchant and Introducing Broker Conflicts 

of Interest rules; and Chief Compliance Officer Rules for Swap Dealers, Major 

Swap Participants, and Futures Commission Merchants

CFTC 4/3/2012 6/4/2012

Customer Clearing Documentation, Timing of Acceptance for Clearing, and 

Clearing Member Risk Management

CFTC 4/9/2012 10/1/2012

Assessment of Fees on Large Bank Holding Companies and Nonbank 

Financial Companies Supervised by the Federal Reserve Board To Cover the 

Expenses of the Financial Research Fund

Treasury 5/21/2012 7/20/2012

Appendix III: Dodd-Frank Rules Classified as 

Major, Final as of July 22, 2013
Appendix III: Dodd-Frank Rules Classified as 

Major, Final as of July 22, 2013

Page 88 GAO-14-67 Dodd-Frank Regulations

Rulemaking 

Responsible 

regulator Published date Effective date

Further Definition of Swap Dealer, Security-Based Swap Dealer, Major Swap 

Participant, Major Security-Based Swap Participant, and Eligible Contract 

Participant Agreement

CFTC and SEC 5/23/2012 7/23/2012

Core Principles and Other Requirements for Designated Contract Markets CFTC 6/19/2012 8/20/2012

Debit Card Interchange Fees and Routing FRS 8/3/2012 10/1/2012

Further Definition of Swap, Security-Based Swap and Security-Based Swap 

Agreement; Mixed Swaps; Security-Based Swap Agreement Recordkeeping 

CFTC and SEC 8/13/2012 10/12/2012

Risk-Based Capital Guidelines: Market Risk OCC, FRS, and

FDIC

8/30/2012 1/1/2013

Disclosure of Payments by Resource Extraction Issuers SEC a 9/12/2012 11/13/2012

Conflict Minerals SEC 9/12/2012 11/13/2012

Ability-to-Repay and Qualified Mortgage Standards Under the Truth in 

Lending Act (Regulation Z)

CFPB 1/30/2013 1/10/2014

Mortgage Servicing Rules Under the Truth in Lending Act (Regulation Z) CFPB 2/14/2013 1/10/2014

Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act 

(Regulation X)

CFPB 2/14/2013 1/10/2014

Loan Originator Compensation Requirements Under the Truth in Lending Act 

(Regulation Z)

CFPB 2/15/2013 6/1/2013

Clearing Exemption for Swaps Between Certain Affiliated Entities CFTC 4/11/2013 6/10/2013

Core Principles and Other Requirements for Swap Execution Facilities CFTC 6/4/2013 8/5/2013

Source: Federal Register, GAO’s Federal Rules database available at http://www.gao.gov/legal/congressact/congress.html. 

a

This rule is no longer in effect because it was vacated by a decision of the U.S. District Court for the 

District of Columbia on July 2, 2013. See American Petroleum Institute et al. v. SEC, —- F.Supp.2d

—-, 2013 WL 3307114 (D.D.C. 2013).
Appendix IV: Interagency Coordination for 

Dodd-Frank Rules Effective on July 24, 2012, 

through July 22, 2013 

Page 89 GAO-14-67 Dodd-Frank Regulations

The following table lists Dodd-Frank rules effective from July 24, 2012 

through July 22, 2013 where the issuing regulator(s) coordinated with at 

least one other federal or foreign regulator during the rulemaking process.

Table 8: Evidence of Interagency Coordination in Dodd-Frank Regulations Effective July 24, 2012, through July 22, 2013

Rulemaking 

Responsible 

regulator

Published 

date 

Effective 

date*

Coordination 

required? Nature of coordination

Voluntary 

coordination?

Electronic Fund Transfers 

(Regulation E) 

CFPB 2/7/2012 2/7/2013 Y CFPB consulted or offered 

to consult with the 

prudential regulators, the 

Federal Trade 

Commission, and 

Treasury’s Financial 

Crimes Enforcement 

Network.

N/A

a

Customer Clearing 

Documentation, Timing of 

Acceptance for Clearing, and 

Clearing Member Risk 

Management

CFTC 4/9/2012 10/1/2012 N CFTC coordinated with 

SEC and the Federal 

Reserve.

Y 

Guidance on the Effective 

Date of Section 716 of the 

Dodd-Frank Wall Street 

Reform and Consumer 

Protection Act

FDIC, 

Federal 

Reserve, and 

OCC

5/10/2012 7/16/2013 N Jointly issued guidance Y 

Swap Data Recordkeeping 

and Reporting Requirements: 

Pre-Enactment and 

Transition Swaps

CFTC 6/12/2012 8/13/2012 Y CFTC coordinated with the 

Federal Reserve, FDIC, 

OCC, and SEC.

N/A

c

Core Principles and Other 

Requirements for Designated 

Contract Markets

CFTC 6/19/2012 8/20/2012 Y CFTC coordinated with 

SEC.

N/A c

Confidential Treatment of 

Privileged Information

CFPB 7/5/2012 8/6/2012 Unclear Although unclear about 

the applicability of DoddFrank section 1022(b)(2), 

to inform the rulemaking 

more fully, CFPB 

consulted or offered to 

consult with the prudential 

regulators and the Federal 

Trade Commission.

Unclear

a

Appendix IV: Interagency Coordination for 

Dodd-Frank Rules Effective on July 24, 2012, 

through July 22, 2013
Appendix IV: Interagency Coordination for 

Dodd-Frank Rules Effective on July 24, 2012, 

through July 22, 2013

Page 90 GAO-14-67 Dodd-Frank Regulations

Rulemaking 

Responsible 

regulator

Published 

date 

Effective 

date*

Coordination 

required? Nature of coordination

Voluntary 

coordination?

Process for Submissions for 

Review of Security-Based 

Swaps for Mandatory 

Clearing and Notice Filing 

Requirements for Clearing 

Agencies; Technical 

Amendments to Rule 19b–4 

and Form 19b–4 Applicable 

to All Self-Regulatory 

Organizations

SEC 7/13/2012 8/13/2012 Y SEC consulted with CFTC 

and the prudential 

regulators.

N/A

b 

End-User Exception to the 

Clearing Requirement for 

Swaps

CFTC 7/19/2012 9/17/2012 Y CFTC coordinated with 

SEC.

N/A c

Defining Larger Participants 

of the Consumer Reporting 

Market

CFPB 7/20/2012 9/30/2012 Unclear Although unclear about 

the applicability of DoddFrank section 1022(b)(2), 

to inform the rulemaking 

more fully, CFPB 

consulted or offered to 

consult with the prudential 

regulators and the Federal 

Trade Commission. CFPB 

also requested comments 

on the final rule from 

relevant state agencies.

Unclear

a

Swap Transaction 

Compliance and 

Implementation Schedule: 

Clearing Requirement Under 

Section 2(h) of the CEA

CFTC 7/30/2012 9/28/2012 Y CFTC consulted with SEC, 

prudential regulators, and 

foreign regulators.c,d

N/A

 

Financial Market Utilities Federal 

Reserve

8/2/2012 9/14/2012 Y The Federal Reserve 

consulted with FSOC, 

SEC and CFTC.

N/A

Debit Card Interchange Fees 

and Routing

Federal 

Reserve

8/3/2012 10/1/2012 Y The Federal Reserve 

consulted with OCC, 

FDIC, NCUA, the Small 

Business Administration, 

and CFPB.

N/A

Further Definition of ‘‘Swap,’’

‘‘Security-Based Swap,’’ and 

‘‘Security-Based Swap 

Agreement’’; Mixed Swaps; 

Security-Based Swap 

Agreement Recordkeeping 

CFTC and 

SEC 

8/13/2012 10/12/2012 Y Jointly issued rule. N/A b,c

Electronic Fund Transfers 

(Regulation E)

CFPB 8/20/2012 2/7/2013 Y CFPB consulted or offered 

to consult with the 

prudential regulators and 

the Federal Trade 

Commission.

N/A

a
Appendix IV: Interagency Coordination for 

Dodd-Frank Rules Effective on July 24, 2012, 

through July 22, 2013

Page 91 GAO-14-67 Dodd-Frank Regulations

Rulemaking 

Responsible 

regulator

Published 

date 

Effective 

date*

Coordination 

required? Nature of coordination

Voluntary 

coordination?

Registration of Intermediaries CFTC 8/28/2012 10/29/2012 N CFTC coordinated with 

SEC. 

Y 

Risk-Based Capital 

Guidelines: Market Risk

FDIC, 

Federal 

Reserve, and 

OCC

8/30/2012 1/1/2013 N Jointly issued rule Y 

Confirmation, Portfolio 

Reconciliation, Portfolio 

Compression, and Swap 

Trading Relationship 

Documentation 

Requirements for Swap 

Dealers and Major Swap 

Participants

CFTC 9/11/2012 11/13/2012 Y CFTC consulted with SEC, 

Federal Reserve, FDIC, 

OCC, and foreign 

regulators including the 

European Securities and 

Markets Authority.

N/A

c,d

Conflict Minerals SEC 9/12/2012 11/13/2012 N SEC coordinated with 

other federal agencies, 

including the U.S. 

Department of State, and 

GAO.

Y 

Annual Stress Test OCC 10/9/2012 10/9/2012 Y As required by the act, 

OCC coordinated with the 

Federal Reserve and FIO. 

OCC also coordinated with 

the other banking 

regulators.

Y 

Supervisory and CompanyRun Stress Test 

Requirements for Covered 

Companies

Federal 

Reserve

10/12/2012 11/15/2012 Y The Federal Reserve 

coordinated with the 

Federal Insurance Office, 

FDIC, and OCC.

N/A

Annual Company-Run Stress 

Test Requirements for 

Banking Organizations With 

Total Consolidated Assets 

Over $10 Billion Other Than 

Covered Companies

Federal 

Reserve

10/12/2012 11/15/2012 Y The Federal Reserve 

coordinated with the 

Federal Insurance Office, 

FDIC, and OCC.

N/A

Annual Stress Test FDIC 10/15/2012 10/15/2012 Y As required by the act, 

FDIC coordinated with the 

Federal Reserve and the 

Federal Insurance Office 

(FIO). FDIC also consulted 

with the other banking 

regulators.

Y 

Enforcement of Subsidiary 

and Affiliate Contracts by the 

FDIC as Receiver of a 

Covered Financial Company

FDIC 10/16/2012 11/15/2012 Y FDIC consulted with 

FSOC.

N/A
Appendix IV: Interagency Coordination for 

Dodd-Frank Rules Effective on July 24, 2012, 

through July 22, 2013

Page 92 GAO-14-67 Dodd-Frank Regulations

Rulemaking 

Responsible 

regulator

Published 

date 

Effective 

date*

Coordination 

required? Nature of coordination

Voluntary 

coordination?

Swap Data Repositories: 

Interpretative Statement 

Regarding the Confidentiality 

and Indemnification 

Provisions of the Commodity 

Exchange Act 

CFTC 10/25/2012 10/25/2012 Y CFTC consulted with 

foreign regulators.

N/A d

Defining Larger Participants 

of the Consumer Debt 

Collection Market 

CFPB 10/31/2012 1/2/2013 Unclear Although unclear about 

the applicability of DoddFrank section 1022(b)(2), 

to inform the rulemaking 

more fully, CFPB 

consulted or offered to 

consult with the prudential 

regulators, the Department 

of Education, the 

Department of Housing 

and Urban Development, 

the Federal Housing 

Finance Agency, and the 

Federal Trade 

Commission.a

Unclear

 

Clearing Agency Standards SEC 11/2/2012 1/2/2013 Y SEC consulted with the 

Federal Reserve and 

FSOC. SEC consulted 

with other financial 

regulators as appropriate.

N/A

Determination of Foreign 

Exchange Swaps and 

Foreign Exchange Forwards 

Under the Commodity 

Exchange Act 

Treasury 11/20/2012 11/20/2012 N Treasury consulted with 

federal regulators.

Y 

Truth in Lending (Regulation 

Z)

CFPB and 

Federal 

Reserve

11/21/2012 1/1/2013 Y Jointly issued rule. N/A a

Consumer Leasing 

(Regulation M)

CFPB and 

Federal 

Reserve

11/21/2012 1/1/2013 Y Jointly issued rule. N/A a
Appendix IV: Interagency Coordination for 

Dodd-Frank Rules Effective on July 24, 2012, 

through July 22, 2013

Page 93 GAO-14-67 Dodd-Frank Regulations

Rulemaking 

Responsible 

regulator

Published 

date 

Effective 

date*

Coordination 

required? Nature of coordination

Voluntary 

coordination?

Delayed Implementation of 

Certain New Mortgage 

Disclosures

CFPB 11/23/2012 11/23/2012 Y CFPB consulted or offered 

to consult with the 

prudential regulators, the 

Department of Housing 

and Urban Development, 

and the Federal Trade 

Commission. CFPB also 

held discussions with or 

solicited feedback from the 

Department of Veterans 

Affairs, the Farm Credit 

Administration, the 

Federal Housing 

Administration, the 

Federal Housing Finance 

Agency, and the 

Department of Agriculture 

Rural Housing Service.

N/A

a

Clearing Requirement 

Determination Under Section 

2(h) of the CEA

CFTC 12/13/2012 2/11/2013 Y CFTC consulted with SEC, 

Federal Reserve, FDIC, 

OCC, and foreign 

regulators.

N/A

c,d

Community Reinvestment Act 

Regulations

FDIC, 

Federal 

Reserve, and 

OCC

12/21/2012 1/1/2013 N Jointly issued rule Y 

Final Exemptive Order 

Regarding Compliance with 

Certain Swap Regulations

CFTC 1/7/2013 12/21/2012 Y CFTC consulted with SEC 

and foreign regulators.c,d

N/A

Escrow Requirements Under 

the Truth in Lending Act 

(Regulation Z)

CFPB 1/22/2013 6/1/2013 Y CFPB consulted or offered 

to consult with the 

prudential regulators, the 

Department of Housing 

and Urban Development, 

and Federal Trade 

Commission.

N/A

a

Loan Originator 

Compensation Requirements 

Under the Truth in Lending 

Act (Regulation Z)

CFPB 2/15/2013 6/1/2013 Y CFPB consulted or offered 

to consult with the 

prudential regulators, the 

Department of Housing 

and Urban Development, 

the Federal Housing 

Finance Agency, and the 

Federal Trade 

Commission.a

N/A

 
Appendix IV: Interagency Coordination for 

Dodd-Frank Rules Effective on July 24, 2012, 

through July 22, 2013

Page 94 GAO-14-67 Dodd-Frank Regulations

Rulemaking 

Responsible 

regulator

Published 

date 

Effective 

date*

Coordination 

required? Nature of coordination

Voluntary 

coordination?

Disclosure of Records and 

Information

CFPB 2/15/2013 3/18/2013 Unclear Although unclear about 

the applicability of DoddFrank section 1022(b)(2), 

to inform the rulemaking 

more fully, CFPB 

consulted or offered to 

consult with the prudential 

regulators.

Unclear

a

Disclosures at Automated 

Teller Machines (Regulation 

E) 

CFPB 3/26/2013 3/26/2013 Unclear Although unclear about 

the applicability of DoddFrank section 1022(b)(2), 

to inform the rulemaking 

more fully, CFPB 

consulted or offered to 

consult with the prudential 

regulators and the Federal 

Trade Commission.

Unclear

a

Truth in Lending (Regulation 

Z)

CFPB 3/28/2013 3/28/2013 Y CFPB consulted or offered 

to consult with the 

prudential regulators and 

the Federal Trade 

Commission.a

N/A

 

Final Order in Response to a 

Petition From Certain 

Independent System 

Operators and Regional 

Transmission Organizations 

To Exempt Specified 

Transactions Authorized by a 

Tariff or Protocol Approved 

by the Federal Energy 

Regulatory Commission or 

the Public Utility Commission 

of Texas From Certain 

Provisions of the Commodity 

Exchange Act Pursuant to 

the Authority Provided in the 

Act 

CFTC 4/2/2013 4/2/2013 N CFTC coordinated with the 

Federal Energy 

Regulatory Commission 

and the Public Utility 

Commission of Texas.

Y 

Definitions of ‘‘Predominantly 

Engaged In Financial 

Activities’’ and ‘‘Significant’’

Nonbank Financial Company 

and Bank Holding Company 

Federal 

Reserve

4/5/2013 5/6/2013 N The Federal Reserve 

consulted with the other 

FSOC members and 

member agencies.

Y 

Retail Foreign Exchange 

Transactions (Regulation NN)

Federal 

Reserve

4/9/2013 5/13/2013 N The Federal Reserve 

consulted with OCC and 

FDIC and considered 

CFTC’s retail forex rule 

(adopted on Sep. 10, 

2010).

Y 
Appendix IV: Interagency Coordination for 

Dodd-Frank Rules Effective on July 24, 2012, 

through July 22, 2013

Page 95 GAO-14-67 Dodd-Frank Regulations

Rulemaking 

Responsible 

regulator

Published 

date 

Effective 

date*

Coordination 

required? Nature of coordination

Voluntary 

coordination?

Clearing Exemption for 

Swaps Between Certain 

Affiliated Entities 

CFTC 4/11/2013 6/10/2013 Y CFTC consulted with 

FDIC, Federal Reserve, 

OCC, SEC, and foreign 

regulators including the 

European Securities and 

Markets Authority, 

European Central Bank, 

and regulators in the 

United Kingdom, Japan, 

Hong Kong, Singapore, 

Sweden, and Canada.c,d

N/A

 

Identity Theft Red Flags 

Rules

CFTC and 

SEC 

4/19/2013 5/20/2013 Y Jointly issued rule N/A

Truth in Lending (Regulation 

Z)

CFPB 5/3/2013 5/3/2013 Y CFPB consulted or offered 

to consult with the 

prudential regulators and 

the Federal Trade 

Commission.a

N/A

 

Consumer Financial Civil 

Penalty Fund

CFPB 5/7/2013 5/7/2013 Unclear Although unclear about 

the applicability of DoddFrank section 1022(b)(2), 

to inform the rulemaking 

more fully, CFPB 

consulted or offered to 

consult with the prudential 

regulators and the Federal 

Trade Commission.a

Unclear

 

Amendments to the 2013 

Escrows Final Rule under the 

Truth in Lending Act 

(Regulation Z)

CFPB 5/23/2013 6/1/2013 Y CFPB consulted or offered 

to consult with the 

prudential regulators, the 

Department of Housing 

and Urban Development, 

the Federal Housing 

Finance Agency, the 

Federal Trade 

Commission, SEC, and 

Treasury.a

N/A

 

Antidisruptive practices 

authority

CFTC 5/28/2013 5/28/2013 Y CFTC consulted with 

SEC.

N/A c
Appendix IV: Interagency Coordination for 

Dodd-Frank Rules Effective on July 24, 2012, 

through July 22, 2013

Page 96 GAO-14-67 Dodd-Frank Regulations

Rulemaking 

Responsible 

regulator

Published 

date 

Effective 

date*

Coordination 

required? Nature of coordination

Voluntary 

coordination?

Loan Originator 

Compensation Requirements 

Under the Truth in Lending 

Act (Regulation Z); 

Prohibition on Financing 

Credit Insurance Premiums; 

Delay of Effective Date 

CFPB 5/31/2013 6/1/2013 Y CFPB consulted or offered 

to consult with the 

prudential regulators, the 

Department of Housing 

and Urban Development, 

the Federal Housing 

Finance Agency, the 

Federal Trade 

Commission, Treasury, 

and United States 

Department of 

Agriculture.a

N/A

 

Definition of ‘‘Predominantly 

Engaged in Activities That 

Are Financial in Nature or 

Incidental Thereto’’ 

FDIC 6/10/2013 7/10/2013 Y As required by the act, 

FDIC consulted with 

Treasury. FDIC also 

coordinated with the 

Federal Reserve.

Y 

Source: GAO analysis of Dodd-Frank Act, Federal Register, and other documents from regulators.

Note: In this report, we use the terms “rules,” “regulations,” or “rulemakings” generally to refer to 

Federal Register notices of agency action pursuant to the Dodd-Frank Act, including regulations, 

interpretive rules, general statements of policy, guidance, and rules that deal with agency 

organization, procedure, or practice. Combined with our past two reports, we have reviewed all DoddFrank Act rules in effect as of July 22, 2013. See GAO, Dodd-Frank Act Regulations: Implementation 

Could Benefit from Additional Analyses and Coordination, GAO-12-151 (Washington, D.C.: Nov. 10, 

2011), and Dodd-Frank Act Regulations: Agencies’ Efforts to Analyze and Coordinate Their Rules, 

GAO-13-101 (Washington, D.C.: Dec. 18, 2012).

*To determine our scope for this review, we considered the earliest effective date shown in the final 

Federal Register releases for each Dodd-Frank rulemaking. If the effective date shown fell within our 

scope, the rule was included even if subsequent rulemakings changed the effective date of the rule.

a

Section 1022(b)(2)(B) of the Dodd-Frank Act requires CFPB, in prescribing a rule under the federal 

consumer financial laws, to consult with the appropriate prudential regulators or other federal 

agencies prior to proposing a rule and during the comment process regarding consistency with 

prudential, market, or systemic objectives administered by such agencies. Additionally, under section 

1015 of the act, CFPB is required to coordinate with SEC, CFTC, the Federal Trade Commission, and 

other federal agencies and state regulators, as appropriate, to promote consistent regulatory 

treatment of consumer financial and investment products and services.

b

According to section 712(a)(2) of the act, SEC shall consult and coordinate to the extent possible 

with CFTC and the prudential regulators before commencing any rulemaking or issuing an order 

regarding security-based swaps, security-based swap dealers, major security-based swap 

participants, security-based swap data repositories, clearing agencies with regard to security-based 

swaps, persons associated with a security-based swap dealer or major security-based swap 

participant, eligible contract participants with regard to security-based swaps, or security-based swap 

execution facilities, for the purposes of assuring regulatory consistency and comparability, to the 

extent possible.

c

According to section 712(a)(1), before commencing any rulemaking or issuing an order regarding 

swaps, swap dealers, major swap participants, swap data repositories, derivative clearing 

organizations with regard to swaps, persons associated with a swap dealer or major swap participant, 

eligible contract participants, or swap execution facilities pursuant to Subtitle A of Title 7 of DoddFrank, CFTC shall consult and coordinate to the extent possible with SEC and the prudential 

regulators for the purposes of assuring regulatory consistency and comparability, to the extent 

possible.

d

According to section 752(a) of the act, in order to promote effective and consistent global regulation 

of swaps and security-based swaps, CFTC, SEC, and the prudential regulators, as appropriate, shall 
Appendix IV: Interagency Coordination for 

Dodd-Frank Rules Effective on July 24, 2012, 

through July 22, 2013

Page 97 GAO-14-67 Dodd-Frank Regulations

consult and coordinate with foreign regulatory authorities on the establishment of consistent 

international standards with respect to the regulation (including fees) of swaps, security-based swaps, 

swap entities, and security-based swap entities and may agree to such information-sharing 

arrangements as may be deemed to be necessary or appropriate in the public interest or for the 

protection of investors, swap counterparties, and security-based swap counterparties.
Appendix V: Summary of Rulemakings Related 

to Selected Dodd-Frank Provisions Applicable 

to Systemically Important Financial Institutions

Page 98 GAO-14-67 Dodd-Frank Regulations

The Dodd-Frank Act contains several provisions that apply to nonbank 

financial companies designated by the Financial Stability Oversight 

Council for Federal Reserve supervision and enhanced prudential 

standards (nonbank SIFI) and bank holding companies with $50 billion or 

more in total consolidated assets (bank SIFI). Table 9 summarizes some 

of those provisions and the rulemakings, including their status, to 

implement those provisions.

Table 9: Rulemakings Implementing Selected Dodd-Frank Provisions Applicable to Systemically Important Financial 

Institutions and Their Status as of November 29, 2013

Dodd-Frank Act provision Rulemaking status

FSOC designation of Nonbank Financial Companies for Federal Reserve 

supervision—Section 113 authorizes FSOC to determine that a nonbank 

financial company shall be subject to enhanced prudential standards and 

supervision by the Federal Reserve if FSOC determines that (i) material 

financial distress or (ii) the nature, scope, size, scale, concentration, 

interconnectedness, or mix of activities at the nonbank financial company 

could pose a threat to the financial stability of the U.S.

FSOC’s final rule and interpretative guidance describe the manner in

which FSOC intends to apply statutory considerations (related to a sixcategory framework for size, interconnectedness, substitutability, 

leverage, and liquidity risk, and maturity mismatch), and the procedures 

FSOC intends to follow, when making a determination to designate a 

nonbank financial company for Federal Reserve supervision under section 

113 of the act.

FSOC final rule and interpretative guidance 

77 Fed. Reg. 21,637 (Apr. 11, 2012)

On July 8, 2013, FSOC voted to designate 2 nonbank 

financial companies for Federal Reserve supervision. 

On September 19, 2013, FSOC voted to designate a 

third nonbank financial company for Federal Reserve 

supervision.

Enhanced supervision and prudential standards—Sections 165 and 

166 require the Federal Reserve to impose enhanced prudential 

standards and early remediation requirements on bank holding 

companies, including foreign banking organizations with total consolidated 

assets of $50 billion or more that are treated as bank holding companies 

for purposes of the Bank Holding Company Act of 1956, and nonbank 

financial companies designated by FSOC to prevent or mitigate risks to 

U.S. financial stability.a

According to the Federal Reserve, the proposed standards for foreign 

banking organizations and foreign nonbank financial companies 

supervised by the Federal Reserve are broadly consistent with the 

standards proposed for large U.S. bank and nonbank SIFIs. The 

December 2012 proposal includes an additional requirement for certain 

foreign banking organizations to form a U.S. intermediate holding 

company, which would generally serve as a U.S. top-tier holding company 

for the U.S. subsidiaries of the company.

 

Federal Reserve proposed rules for U.S. and foreign 

organizations operating in the U.S. 

77 Fed. Reg. 594 (Jan. 5, 2012) and 

77 Fed. Reg. 76,628 (Dec. 28, 2012),

respectively.

Appendix V: Summary of Rulemakings 

Related to Selected Dodd-Frank Provisions 

Applicable to Systemically Important 

Financial Institutions

b
Appendix V: Summary of Rulemakings Related 

to Selected Dodd-Frank Provisions Applicable 

to Systemically Important Financial Institutions

Page 99 GAO-14-67 Dodd-Frank Regulations

Dodd-Frank Act provision Rulemaking status

Enhanced risk-based capital and leverage requirements required 

under section 165(b)(1)(A)(i)—capital plans: Bank holding companies 

with $50 billion or more in total consolidated assets and nonbank 

financial companies designated by FSOC must comply with the 

requirements of any regulations adopted by the Federal Reserve on 

capital plans and stress tests, including the Federal Reserve’s capital 

plan rule, which requires such companies to submit an annual capital 

plan to the Board for review that, together with the proposed stress 

tests (below), would demonstrate to the Board that the company has 

robust, forward-looking capital planning processes that account for 

their unique risks and permit continued operations during times of 

stress.c Intermediate holding companies of foreign banking 

organizations would generally be subject to the same U.S. risk-based 

and leverage capital standards that apply to a U.S. bank holding 

company. An intermediate holding company of a foreign banking 

organization with total consolidated assets of $50 billion or more 

would be subject to the Federal Reserve’s capital plan rule.

proposal included in Jan. 5, 2012 rule 

and Dec. 28, 2012 rule

Enhanced risk-based capital and leverage requirements required 

under section 165(b)(1)(A)(i)—capital surcharges: The Federal 

Reserve intends to issue a proposal imposing a quantitative riskbased capital surcharge for all or a subgroup of bank holding 

companies with $50 billion or more in total consolidated assets, 

certain foreign banking organizations, and nonbank financial 

companies designated by FSOC based on the Basel capital 

surcharge for Globally Systemically Important Banks (G-SIB).d The 

Federal Reserve stated that it may, through a future rulemaking, 

impose a capital surcharge to an intermediate holding company of a 

foreign banking organization that is determined to be a domestic 

systemically important bank, consistent with the Basel Committee’s 

regime or a similar framework.

intention to propose included in Jan. 5, 2012 rule 

and Dec. 28, 2012 rule

Enhanced liquidity requirements required under section 

165(b)(1)(A)(ii)—liquidity risk management standards: Bank holding 

companies with $50 billion or more in total consolidated assets and 

nonbank financial companies designated by FSOC would be subject 

to liquidity risk management standards that require those companies 

to, among other things, project cash flow needs over various time 

horizons, stress test the projections at least monthly, determine a 

liquidity buffer, and maintain a contingency funding plan that identifies 

potential sources of liquidity strain and alternative sources of funding.

Large foreign banking organizations with combined U.S. assets of 

$50 billion or more must meet liquidity risk management standards 

that are broadly similar to the standards proposed for U.S. firms.

proposal included in Jan. 5, 2012 rule 

and Dec. 28, 2012 rule
Appendix V: Summary of Rulemakings Related 

to Selected Dodd-Frank Provisions Applicable 

to Systemically Important Financial Institutions

Page 100 GAO-14-67 Dodd-Frank Regulations

Dodd-Frank Act provision Rulemaking status

Enhanced liquidity requirements required under Section 

165(b)(1)(A)(ii)—Basel liquidity ratios: The banking agencies have 

proposed a liquidity coverage ratio requirement, consistent with the 

international liquidity standards published by the Basel Committee on 

Banking Supervision for large, internationally active banking 

organizations with more than $250 billion in assets, nonbank financial 

companies designated by FSOC for Federal Reserve supervision that 

do not have substantial insurance activities, and their consolidated 

subsidiary depository institutions with $10 billion or more in total 

consolidated assets. The Federal Reserve is proposing a modified 

liquidity coverage ratio for bank holding companies without significant 

insurance or commercial operations that have $50 billion or more in 

total consolidated assets.

Federal Reserve, FDIC, and OCC proposed rule 

78 Fed. Reg. 71,818 (Nov. 29, 2013) 

Credit exposure reports required under section 165(d)(2): Section 

165 also requires the Federal Reserve to impose credit exposure 

reporting requirements on bank holding companies with $50 billion or 

more in total consolidated assets, certain foreign banking 

organizations, and nonbank financial companies designated by 

FSOC. The joint proposed rule would require those companies to 

report credit exposures to other covered companies and credit

exposures that other covered companies have to that company. 

Federal Reserve and FDIC proposed rule 

76 Fed. Reg. 22,648 (Apr. 22, 2011)

Concentration limits required under section 165(e): As required by the 

act, the Federal Reserve would prohibit bank holding companies with 

$50 billion or more in total consolidated assets, certain large foreign 

banking organizations and intermediate holding companies, and 

nonbank financial companies designated by FSOC from having credit 

exposure to any unaffiliated company that exceeds 25 percent of the 

company’s capital stock and surplus or total consolidated regulatory 

capital. The Federal Reserve proposed a more stringent credit 

exposure limit of 10 percent between the largest, more complex 

financial institutions.

proposal included in January 5, 2012 rule

and Dec. 28, 2012 rule

Stress Tests required under section 165(i): Bank holding companies 

with $50 billion or more in total consolidated assets, certain foreign 

banking organizations, and nonbank financial companies designated 

by FSOC are required by the Act to conduct semi-annual companyrun stress tests, and the Federal Reserve is required to conduct an 

annual stress test on each of those companies.e The final rule builds 

on the stress tests required under the capital plans that large, 

complex bank holding companies submitted to the Federal Reserve 

for supervision under the Supervisory Capital Assessment Program in 

2009, the subsequent Comprehensive Capital and Analysis Review in 

2011, and the capital plan rule effective Dec. 30, 2011.

Federal Reserve final rule 

77 Fed. Reg. 62,378 (Oct. 12, 2012)

for foreign banking organizations, proposal 

included in Dec. 28, 2012 rule

Resolution plans required under section 165(d)(1): Section 165 also 

requires the Federal Reserve to require resolution plans from bank 

holding companies with $50 billion or more in total consolidated 

assets, certain foreign banking organizations, and nonbank financial 

companies designated by FSOC. The joint final rule requires each 

plan to include, among other things, information about the company’s 

ownership structure, core business lines, and critical operations, and 

a strategic analysis of how the SIFI can be resolved under the U.S. 

Bankruptcy Code in a way that would not pose systemic risk to the 

financial system.

Federal Reserve and FDIC final rule 

76 Fed. Reg. 67,323 (Nov. 1, 2011)
Appendix V: Summary of Rulemakings Related 

to Selected Dodd-Frank Provisions Applicable 

to Systemically Important Financial Institutions

Page 101 GAO-14-67 Dodd-Frank Regulations

Dodd-Frank Act provision Rulemaking status

Debt-to-Equity Limits under section 165(j): Section 165(j) provides 

that the Federal Reserve must require bank holding companies with 

$50 billion or more in total consolidated assets, certain foreign 

banking organizations, and nonbank financial companies designated 

by FSOC to maintain a debt-to-equity ratios of no more than 15-to-1, 

upon a determination by the Council that (i) such company poses a 

grave threat to the financial stability of the United States and (ii) the 

imposition of such a requirement is necessary to mitigate the risk that 

the company poses to U.S. financial stability. The proposed rules 

would implement the debt-to-equity limitation. 

proposal included in Jan. 5, 2012 rule 

and Dec. 28, 2012 rule

Early remediation requirements under section 166: Section 166 

requires the Federal Reserve, in consultation with FSOC and FDIC, 

to prescribe regulations to provide for the early remediation of 

financial distress of bank holding companies with $50 billion or more 

in total consolidated assets, certain foreign banking organizations, 

and nonbank financial companies designated by FSOC. The 

proposed requirements would include a number of triggers for 

remediation, including capital levels, stress test results, and risk 

management weaknesses. In certain situations, the Federal Reserve 

would impose restrictions on asset growth, acquisitions, capital 

distributions and executive compensation, and other activities that the 

Federal Reserve deems appropriate. The proposed rule for foreign 

banking organizations adapts these requirements to their U.S. 

operations, tailored to address the risks to U.S. financial stability 

posed by the U.S. operations of foreign banking organizations and 

taking into consideration their structure.

proposal included in Jan. 5, 2012 rule

and Dec. 28, 2012 rule

FDIC Orderly Liquidation Authority—Title II gives the FDIC new orderly 

liquidation authority to act as a receiver in the event of a failure of certain 

systemically important financial companies, including certain bank holding 

companies and nonbank financial companies that pose significant risk to 

the financial stability of the U.S. The rule establishes a more 

comprehensive framework for the implementation of the liquidation 

authority and is intended to provide greater transparency to the process.

FDIC final rule 

76 Fed. Reg. 41,626 (July 15, 2011)

Federal Reserve authority to impose mitigatory actions on certain 

nonbank financial companies determined to pose a grave threat to 

financial stability—Section 121(a) allows the Federal Reserve, with a 

two-thirds vote by FSOC, to impose certain additional restrictions on bank 

holding companies with $50 billion or more in total consolidated assets 

and nonbank financial companies designated by FSOC determined to 

pose a grave threat to the financial stability of the United States, including 

limiting mergers and acquisitions, requiring the company to terminate 

activities, or requiring the company to sell or transfer assets or offbalance-sheet items to unaffiliated entities.

No rules issued
Appendix V: Summary of Rulemakings Related 

to Selected Dodd-Frank Provisions Applicable 

to Systemically Important Financial Institutions

Page 102 GAO-14-67 Dodd-Frank Regulations

Dodd-Frank Act provision Rulemaking status

Collins Amendment—Section 171(b) requires the appropriate federal 

banking agencies to establish permanent minimum risk-based capital and 

leverage floors on insured depository institutions, depository institution 

holding companies, and nonbank financial companies designated by 

FSOC. 

Under the final rule, these institutions must calculate their floors using the 

minimum risk-based capital and leverage requirements under the prompt 

corrective action framework implementing section 38 of the Federal 

Deposit Insurance Act.

Federal Reserve, FDIC, and OCC final rule 

76 Fed. Reg. 37,620 (June 28, 2011)

Concentration Limit/ liability cap on large financial institutions—

Section 622 establishes, subject to recommendations by FSOC, a 

financial sector concentration limit that generally prohibits a financial 

company from merging or consolidating with, acquiring all or substantially 

all of the assets of, or otherwise acquiring control of, another company if 

the resulting company’s consolidated liabilities would exceed 10 percent 

of the aggregate consolidated liabilities of all financial companies.

No rules issued

Source: Dodd-Frank Act, Federal Register, and other documents from regulators and FSOC.

a

Section 165 directs the Federal Reserve to impose enhanced prudential standards for bank holding 

companies with $50 billion or more in total consolidated assets, certain foreign banking organizations, 

and nonbank financial companies designated by FSOC regarding overall risk management, which 

were also proposed in the January 5, 2012 rule. Additionally, section 165 also authorizes FSOC to 

recommend additional enhanced prudential standards for bank holding companies with $50 billion or 

more in total consolidated assets, certain foreign banking organizations, and nonbank financial 

companies designated by FSOC to the Federal Reserve.

b

In this January 5, 2012 proposed rule, the Federal Reserve proposed rules to implement certain but 

not all of the requirements of sections 165 and 166 of the Dodd-Frank Act and stated its intention to 

propose others.

c

Bank SIFIs are already required to comply with the capital plan rule. The Federal Reserve issued its 

final capital plans rule on December 1, 2011 (see 76 Fed. Reg. 74,631). On September 30, 2013, the 

Federal Reserve issued an interim final rule that amends the capital plan and stress test rules and 

clarifies how bank SIFIs must incorporate the new U.S. Basel III-based final capital rules into their 

capital plan submissions and stress tests. See 78 Fed. Reg. 59,779.

d

In November 2011, the Financial Stability Board identified 29 G-SIBs and indicated it would update 

this list annually each November. FSB last updated this list on November 11, 2013. The updated list 

contains 29 G-SIBs; the same eight U.S, bank SIFIs were designated as G-SIBs in 2011, 2012, and 

2013.

e

Section 165(i)(2) of the Act requires that any bank holding company with more than $10 billion in 

total consolidated assets and that is regulated by a federal financial regulatory agency also be subject 

to company-run stress tests. The Federal Reserve issued a separate rule to implement this 

requirement. 77 Fed. Reg. 62,396 (Oct. 12, 2012).
Appendix VI: Trends in GAO Indicators for 

Bank SIFIs

Page 103 GAO-14-67 Dodd-Frank Regulations

As we reported last year, some Dodd-Frank Act provisions and related 

rules may result in adjustments to the size, interconnectedness, 

complexity, leverage, or liquidity of systemically important financial 

institutions (SIFI) over time.1 We developed indicators to monitor changes 

in some of these SIFI characteristics. The size and complexity indicators 

reflect the potential for a single company’s financial distress to affect the 

financial system and economy. The leverage and liquidity indicators 

reflect a SIFI’s resilience to shocks or its vulnerability to financial distress. 

Like we did in our last report, we continue to focus our analysis on bank 

SIFIs, given that FSOC only recently designated three nonbank financial 

firms for Federal Reserve supervision.2 Our indicators have limitations. 

For example, the indicators do not identify causal links between changes 

in SIFI characteristics and the act. Rather, the indicators track changes in 

the size, complexity, leverage, and liquidity of SIFIs over the period since 

the Dodd-Frank Act was passed to examine whether the changes are 

consistent with the act. However, other factors—including the economic 

downturn, international banking standards agreed upon by the Basel 

Committee on Banking Supervision (Basel Committee), European debt 

crisis, and monetary policy actions—also affect bank holding companies 

and, thus, the indicators.3 These factors may have a greater effect than 

the Dodd-Frank Act on SIFIs. As discussed, some rules implementing 

SIFI-related provisions have not yet been finalized. Thus, trends in our 

indicators include the effects of these rules only insofar as SIFIs have 

changed their behavior in response to issued rules and in anticipation of 

expected rules. In this sense, our indicators provide baselines against 

which to compare future trends.

 

1

GAO-13-101. 

2

Our analyses of bank SIFIs include U.S. bank holding companies with total consolidated 

assets of $50 billion or more and foreign bank organizations’ U.S.-based bank holding 

company subsidiaries that on their own have total consolidated assets of $50 billion or 

more.

3

The Basel Committee has agreed on a new set of risk-based capital, leverage, liquidity, 

and other requirements for banking institutions (Basel III requirements). Additionally, the 

Financial Stability Board and the Basel Committee have agreed on new capital and other 

requirements applicable to designated globally systemically important banks (G-SIB 

requirements). U.S. banking regulators have implemented some of these requirements, 

and the Federal Reserve has indicated its intention to base some of the SIFI enhanced 

prudential standards on the Basel III and G-SIB requirements. For more details see 

appendix V. 

Appendix VI: Trends in GAO Indicators for 

Bank SIFIs
Appendix VI: Trends in GAO Indicators for 

Bank SIFIs

Page 104 GAO-14-67 Dodd-Frank Regulations

We developed three indicators of size. The first indicator tracks the 

number of U.S. bank SIFIs. The second indicator measures a SIFI’s size 

based on the total assets on its balance sheet. The third indicator 

measures the extent to which industry assets are concentrated among 

the individual SIFIs, reflecting a SIFI’s size relative to the size of the 

industry. A limitation of these indicators is that they do not include an 

institution’s off-balance sheet activities and thus may understate the 

amount of financial services or intermediation an institution provides. 

Furthermore, asset size alone is not an accurate determinant of systemic 

risk, as an institution’s systemic risk significance also depends on other 

factors, such as its complexity and interconnectedness.

As shown in figure 6, there were 33 bank SIFIs (i.e., bank holding 

companies with $50 billion or more in total consolidated assets) in the 

second quarter of 2013. The figure also shows that six of the bank SIFIs 

had more than $500 billion in total consolidated assets (referred to as 

large bank SIFIs in this report) and were considerably larger than the 

other bank SIFIs.

SIFI Size
Appendix VI: Trends in GAO Indicators for 

Bank SIFIs

Page 105 GAO-14-67 Dodd-Frank Regulations

Figure 6: 2013 U.S. Bank SIFIs’ Total Assets, as of Second Quarter 2013

Note: Bank SIFIs are bank holding companies with $50 billion or more in total consolidated assets. 

Bank SIFIs are ranked by assets as of the second quarter of 2013, with 1 being the bank SIFI with the 

most amount of assets and 33 being the bank SIFI with the least amount of assets.
Appendix VI: Trends in GAO Indicators for 

Bank SIFIs

Page 106 GAO-14-67 Dodd-Frank Regulations

Our indicators show that the number and size of U.S. bank SIFIs declined 

from the third quarter of 2010 through the second quarter of 2013, and 

several SIFIs continue to dominate and have increased their dominance 

of the market.

• Table 10 shows that the total number of U.S. bank SIFIs decreased 

by three over the period: (1) the number of large bank SIFIs 

decreased by one and (2) the number of other bank SIFIs decreased 

by two. In our November 2012 report, we noted that there were seven 

large SIFIs as of the second quarter of 2012. Six of them continue to 

be large bank SIFIs as of the third quarter of 2013. In February 2013, 

the remaining one received regulatory approval to deregister as a 

bank holding company.

• Table 10 also shows that the median assets for U.S. bank SIFIs 

declined by about $21.5 billion (about 12 percent) over the period. 

However, median assets for large bank SIFIs increased from $1,278.1 

billion to $1,662.3 billion, or by $384.2 (about 30 percent), in part 

because one of the large bank SIFIs deregistered as a bank holding 

company in 2013. Median assets for the other bank SIFIs decreased 

from $139.8 billion to $118.8 billion, or by $21 billion (about 15 

percent).

Table 10: Number and Median Size of U.S. Bank Holding Companies and Bank SIFIs 

as of Third Quarter 2010, Second Quarter 2012, and Second Quarter 2013 (Assets in 

Billions of Constant 2013 Q2 Dollars)

2010 Q3 2012 Q2 2013 Q2

Total bank holding 

companies

Number 1,018 1,028 1,035

Median assets $1.0 $1.0 $0.9 

Total SIFIs Number 36 34 33

Median assets $172.1 $165.6 $150.6 

Large SIFIs Number 7 7 6 

Median assets $1,278.1 $1,354.6 $1,662.3 

Other SIFIs Number 29 27 27

Median assets $139.8 $119.2 $118.8 

Non-SIFIs Number 982 994 1,002

Median assets $1.0 $0.9 $0.9 

Source: GAO analysis of data from the Federal Reserve Bank of Chicago and the Bureau of Economic Analysis.

Note: Median assets are adjusted for inflation and are measured in billions of constant 2013 Q2 

dollars. We used data on top-tier bank holding companies that filed form FR Y-9C, which is generally 

filed by top-tier bank holding companies with assets of $500 million or more, although a small number 

of bank holding companies with assets below that threshold also filed form FR Y-9C. We define large 

bank SIFIs as those with assets of $500 billion or more. Other bank SIFIs are those with assets 
Appendix VI: Trends in GAO Indicators for 

Bank SIFIs

Page 107 GAO-14-67 Dodd-Frank Regulations

between $50 billion and $500 billion. Non-SIFI bank holding companies are those with assets less 

than $50 billion.

• Figure 7 shows that the median market share for large bank SIFIs 

increased from 7.4 percent to 10.3 percent (or by about 40 percent) of 

the industry’s assets from the third quarter of 2010 through the 

second quarter of 2013. In contrast, the median market share for the 

other bank SIFIs declined from 0.8 percent to 0.7 percent (or by about 

9 percent) over the same period.

Figure 7: Median Market Share for U.S. Bank Holding Companies by Size, from First Quarter 2006 through Second Quarter 

2013

Note: To calculate the median market shares, we calculated the market share for each bank holding 

company, and then reported the median market share for large bank SIFIs, the median for other bank 

SIFIs, and the median for non-SIFI banks. We used data on top-tier bank holding companies that filed 

form FR Y-9C, which is generally filed by top-tier bank holding companies with assets of $500 million 

or more, although a small number of bank holding companies with assets below that threshold also 

filed form FR Y-9C. We define large bank SIFIs as those with assets of $500 billion or more. Other 

bank SIFIs are those with assets between $50 billion and $500 billion. Non-SIFI bank holding 

companies are those with assets less than $50 billion.

Our indicators of complexity are the number of legal entities of bank 

SIFIs, the percentage of foreign legal entities of large SIFIs, and the 

number of countries where they are located. An institution’s operational 

complexity may reflect an institution’s diverse lines of business and 

Complexity of SIFIs
Appendix VI: Trends in GAO Indicators for 

Bank SIFIs

Page 108 GAO-14-67 Dodd-Frank Regulations

locations in which the institution operates, which are reflected partly 

through its various legal structures. Consequently, a SIFI with a large 

number of legal entities—particularly foreign ones operating in different 

countries under different regulatory regimes—may be more difficult to 

resolve than a SIFI with fewer legal entities in fewer countries. One 

limitation of our indicator is that it does not provide information on the 

relative complexity of SIFIs resulting directly from their various lines of 

business. Additionally, changes in the operational complexity of a SIFI 

may be reflected in our indicators only insofar as they result in a change 

in the number of legal entities.

The complexity indicators continue to show that most large bank SIFIs 

have a relatively large number of legal entities compared with other U.S. 

bank SIFIs and that they operate in various countries. They also show 

that some of the large bank SIFIs may be becoming less but others more 

complex:

• Figure 8 shows that the six large bank SIFIs in the second quarter of 

2013 continue to have more than 2,300 legal entities, with two of them 

having more than 7,000 and 10,000, respectively.4

 

4

In our last report we presented the information in figure 3 and table 7 using data as of 

October 23, 2012, and October 22, 2012, respectively. This report uses data as of the 

June 30th in 2010, 2012, and 2013 to provide analysis of trend changes that are more 

consistent with the time frames used in the other indicators.

Five of the large 

SIFIs had fewer legal entities at the end of the second quarter of 2013 

than they had at the end of the second quarter of 2010. The median 

number of legal entities for the large bank SIFIs decreased from 4,991 

to 3,682 from the second quarters 2010 to the second quarter of 

2013. The median for the remaining 27 bank SIFIs also declined from 

108 to 107 over the same period. Within this group, 21 of the 27 bank 

holding companies had less than 200 legal entities over the period.
Appendix VI: Trends in GAO Indicators for 

Bank SIFIs

Page 109 GAO-14-67 Dodd-Frank Regulations

Figure 8: 2013 U.S. Bank SIFIs’ Total Legal Entities, as of June 30, 2010, June 30, 2012, and June 30, 2013 

Note: Bank SIFIs are ranked by assets as of the second quarter of 2013, with 1 being the bank SIFI 

with the most assets and 33 being the bank SIFI with the least assets.
Appendix VI: Trends in GAO Indicators for 

Bank SIFIs

Page 110 GAO-14-67 Dodd-Frank Regulations

• Table 11 shows that five of the six large U.S. bank SIFIs in the second 

quarter of 2013 continue to have a high number or percentage of 

foreign legal entities, and some may be becoming less complex but 

others more complex based on these indicators. Four large bank 

SIFIs decreased their number or percentage of legal entities located 

outside of the United States from the second quarter of 2010 to the 

second quarter of 2013. Additionally, for these large SIFIs, the 

number of countries where their foreign legal entities operate 

decreased or remained stable over the period. In contrast, two large 

bank SIFIs increased both their number and percentage of legal 

entities located outside of the United States over the period, and for 

one of them the number of countries where its foreign entities 

operated increased by 50 percent.

Table 11: 2013 Large Bank SIFIs’ Foreign Legal Entities, as of June 30, 2010, June 30, 2012, and June 30, 2013

Total number of legal entities, 

as of June 30th

Number and percentage of foreign 

legal entities, as of June 30th

Number of countries where 

foreign entities are located, as 

of June 30th

Bank SIFI 

ranking 2013 2012 2010 2013 2012 2010 2013 2012 2010

Bank SIFI 1 4,093 4,159 5,099 798

(19%)

808

(19%)

1,104

(22%)

49 51 49

Bank SIFI 2 2,750 2,604 3,643 1,147

(42%)

669

(26%)

1,014

(28%)

48 47 55

Bank SIFI 3 2,136 2,324 2,449 1,263

(59%)

1,237

(53%)

1,360

(56%)

79 82 83

Bank SIFI 4 3,285 4,621 4,965 187

(6%)

207

(4%)

254

(5%)

21 23 20

Bank SIFI 5 10,635 11,621 9,737 6,041

(57%)

5,986

(52%)

4,244

(44%)

63 61 42

Bank SIFI 6 7,010 7,764 8,425 3,835

(55%)

4,177

(54%)

4,718

(56%)

54 55 59

Source: GAO analysis of National Information Center data maintained by the Federal Reserve.

Note: Foreign entities are entities located outside of the 48 U.S. contiguous states, Alaska, and 

Hawaii. Large bank SIFIs are those with assets of $500 billion or more. Bank SIFIs are ranked by 

assets as of the second quarter of 2013, with 1 being the bank SIFI with the most assets. 

Although there are many ways to measure leverage, we use two 

measures: (1) tangible common equity as a percentage of total assets, 

and (2) tangible common equity as a percentage of risk-weighted assets. 

The two indicators differ, in part because total risk-weighted assets reflect 

some of an institution’s off-balance sheet activity but total assets do not. 

SIFI Leverage
Appendix VI: Trends in GAO Indicators for 

Bank SIFIs

Page 111 GAO-14-67 Dodd-Frank Regulations

We focus on tangible common equity, because it most closely 

approximates the amount of capital available to absorb losses in asset 

values in the short term. A limitation of both indicators is that they may not 

fully reflect an institution’s exposure to risk. Total assets do not reflect an 

institution’s risk exposure from off-balance sheet activities and generally 

treat all assets as equally risky. The calculation of risk-weighted assets is 

designed to reflect differences in risk, but the weights assigned to the 

assets may not fully reflect the risk exposure associated with those 

assets, for example, because assets in broad categories of loans all 

receive the same risk weight.

Our indicators suggest that large and other bank SIFIs have decreased 

their leverage since the third quarter of 2010, but have slightly decreased 

or not changed their leverage levels over the past year.

• Figure 9 shows that median tangible common equity as a percentage 

of total assets generally continued its upward trend for large and other 

bank SIFIs from the third quarter of 2010 through the second quarter 

of 2013. For large bank SIFIs, the indicator increased from 6.3 

percent to 6.8 percent (or by about 8 percent). For the other bank 

SIFIs, the indicator increased from 6.8 percent to 8.2 percent (or by 

about 21 percent).
Appendix VI: Trends in GAO Indicators for 

Bank SIFIs

Page 112 GAO-14-67 Dodd-Frank Regulations

Figure 9: Median Tangible Common Equity as a Percentage of Total Assets for Bank Holding Companies by Size, from First 

Quarter 2006 through Second Quarter 2013

Note: To calculate median tangible common equity as a percentage of assets, we calculated this 

percentage for each bank holding company, and then reported the median for large bank SIFIs, the 

median for other bank SIFIs, and the median for non-SIFI banks. We used data on top-tier bank 

holding companies that filed form FR Y-9C, which is generally filed by top-tier bank holding 

companies with assets of $500 million or more, although a small number of bank holding companies 

with assets below that threshold also filed form FR Y-9C. We define large bank SIFIs as those with 

assets of $500 billion or more. Other bank SIFIs are those with assets between $50 billion and $500 

billion. Non-SIFI bank holding companies are those with assets less than $50 billion.

• Figure 10 shows that median tangible common equity as a 

percentage of risk-weighted assets, which include off-balance sheet 

activity, increased from the third quarter of 2010 through the second 

quarter of 2013 but fluctuated over the period. For large bank SIFIs, 

the indicator increased from 10.8 percent to 11.8 percent (or by about 

9 percent) over the period. For the other SIFIs, the indicator increased 

from 9.4 percent to 10.3 percent (or by about 10 percent) over the 

period. This measure of leverage did not change much for either 

group of SIFIs from mid-2012 to mid-2013.
Appendix VI: Trends in GAO Indicators for 

Bank SIFIs

Page 113 GAO-14-67 Dodd-Frank Regulations

Figure 10: Median Tangible Common Equity as a Percentage of Risk-Weighted Assets for Bank Holding Companies by Size, 

from First Quarter 2006 through Second Quarter 2013

Note: To calculate median tangible common equity as a percentage of risk-weighted assets, we 

calculated this percentage for each bank holding company, and then reported the median for large 

bank SIFIs, the median for other bank SIFIs, and the median for non-SIFI banks. We used data on 

top-tier bank holding companies that filed form FR Y-9C, which is generally filed by top-tier bank 

holding companies with assets of $500 million or more, although a small number of bank holding 

companies with assets below that threshold also filed form FR Y-9C. We define large bank SIFIs as 

those with assets of $500 billion or more. Other bank SIFIs are those with assets between $50 billion 

and $500 billion. Non-SIFI bank holding companies are those with assets less than $50 billion.

We developed two indicators to analyze changes in SIFI liquidity: (1) 

short-term liabilities as a percentage of total liabilities and (2) liquid assets 

as a percentage of short-term liabilities. Short-term liabilities are balance 

sheet obligations due within 1 year; an institution’s short-term liabilities as 

a percentage of total liabilities are a measure of its need for liquidity. 

Liquid assets can easily be sold without affecting their price and, thus, 

can be easily converted to cash to cover debts that come due. 

Accordingly, liquid assets as a percentage of an institution’s short-term 

liabilities are a measure of access to liquidity. For example, if this 

percentage is under 100 percent, the institution does not have sufficient 

access to liquidity and is unlikely to have enough liquid assets to cover its 

short-term debt. A limitation of both of these indicators is that they do not 

include off-balance sheet liabilities, such as callable derivatives or 

SIFI Liquidity
Appendix VI: Trends in GAO Indicators for 

Bank SIFIs

Page 114 GAO-14-67 Dodd-Frank Regulations

potential derivatives-related obligations. The second indicator also does 

not include off-balance sheet liquid assets, such as short-term income 

from derivative contracts.5

Our indicators show that U.S. bank SIFIs have improved their liquidity 

from the third quarter of 2010 through the second quarter of 2013, 

although one of our measures shows that large bank SIFIs’ liquidity 

deteriorated from mid-2012 to mid-2013. The figures also show that large 

bank SIFIs held relatively more short-term liabilities and liquid assets to 

cover such liabilities than other bank SIFIs.

• Figure 11 shows that median short-term liabilities as a percentage of 

total liabilities for large bank SIFIs decreased from 55.1 percent to 

52.0 percent (or by about 6 percent) over the period, but it increased 

from mid-2012 to mid-2013, reversing a downward trend. For the 

other bank SIFIs, the indicator continued its downward trend over the 

period—declining from 25.4 percent to 20.8 percent (or by about 18 

percent).

 

5

Because these limitations affect both the numerator and the denominator of our 

indicators, we cannot determine whether the exclusion of off-balance sheet items results 

in an under- or an overstatement of an institution’s liquidity need and access. 
Appendix VI: Trends in GAO Indicators for 

Bank SIFIs

Page 115 GAO-14-67 Dodd-Frank Regulations

Figure 11: Median Short-Term Liabilities as a Percentage of Total Liabilities for U.S. Bank Holding Companies by Size, from 

First Quarter 2006 through Second Quarter 2013

Note: To calculate median short-term liabilities as a percentage of total liabilities, we calculated this 

percentage for each bank holding company, and then reported the median for large bank SIFIs, the 

median for other bank SIFIs, and the median for non-SIFI banks. We used data on top-tier bank 

holding companies that filed form FR Y-9C, which is generally filed by top-tier bank holding 

companies with assets of $500 million or more, although a small number of bank holding companies 

with assets below that threshold also filed form FR Y-9C. We define large bank SIFIs as those with 

assets of $500 billion or more. Other bank SIFIs are those with assets between $50 billion and $500 

billion. Non-SIFI bank holding companies are those with assets less than $50 billion.

• Figure 12 shows that median short-term (or liquid) assets as a 

percentage of short-term liabilities generally continued its upward 

trend for both large and other SIFIs from the third quarter of 2010 

through the second quarter of 2013. Specifically, the indicator 

increased from 100.7 percent to 136.5 percent (or by 35 percent) for 

large bank SIFIs and from 79.0 percent to 104.9 percent (or by 33 

percent) for other bank SIFIs.
Appendix VI: Trends in GAO Indicators for 

Bank SIFIs

Page 116 GAO-14-67 Dodd-Frank Regulations

Figure 12: Median Liquid Assets as a Percentage of Short-term Liabilities for U.S. Bank Holding Companies by Size, from 

First Quarter 2006 through Second Quarter 2013

Note: To calculate median liquid assets as a percentage of short-term liabilities, we calculated this 

percentage for each bank holding company, and then reported the median for large bank SIFIs, the 

median for other bank SIFIs, and the median for non-SIFI banks. We used data on top-tier bank 

holding companies that filed form FR Y-9C, which is generally filed by top-tier bank holding 

companies with assets of $500 million or more, although a small number of bank holding companies 

with assets below that threshold also filed form FR Y-9C. We define large bank SIFIs as those with 

assets of $500 billion or more. Other bank SIFIs are those with assets between $50 billion and $500 

billion. Non-SIFI bank holding companies are those with assets less than $50 billion.
Appendix VII: Econometric Analyses of the 

Impact of Enhanced Regulation and Oversight 

on SIFIs

Page 117 GAO-14-67 Dodd-Frank Regulations

We conducted an econometric analysis to assess the impact of the DoddFrank Act’s new requirements for bank SIFIs on (1) the cost of credit they 

provide and (2) their safety and soundness. Our multivariate econometric 

model uses a difference-in-difference design that exploits the fact that the 

Dodd-Frank Act subjects bank holding companies with total consolidated 

assets of $50 billion or more to enhanced regulation by the Federal 

Reserve but not others, so we can view bank holding companies with 

total consolidated assets of $50 billion or more (bank SIFIs) as the 

treatment group and other bank holding companies as the control group. 

We compared the changes in the characteristics of U.S. bank SIFIs over 

time to changes in the characteristics of other U.S. bank holding 

companies over time. All else being equal, the difference in the 

differences is the initial impact of new requirements for bank SIFIs 

primarily tied to enhanced regulation and oversight under the Federal 

Reserve.

Our general regression specification is the following:

ybq = αb + βq + γSIFIbq + X’bqΦ + εbq

where b denotes the bank holding company, q denotes the quarter, ybq is 

the dependent variable, αb is a bank holding company-specific intercept, 

βq is a quarter-specific intercept, SIFIbq is an indicator variable that equals 

1 if bank holding company b is a SIFI in quarter q and 0 otherwise, Xbq is 

a list of other independent variables, and εbq is an error term. We 

estimated the parameters of the model using quarterly data on top-tier 

bank holding companies that filed form FR Y-9C for the period from the 

first quarter of 2006 to the second quarter of 2012.

The parameter of interest is γ, the coefficient on the SIFI indicator, which 

is equal to one for bank holding companies with consolidated assets of 

$50 billion or more in the quarters starting with the treatment start date 

and is equal to zero otherwise. The Dodd-Frank Act was enacted in July 

2010, so the treatment start date is the third quarter of 2010. Thus, the 

parameter γ measures the average difference in the difference in 

dependent variable between bank SIFIs and other bank holding 

companies after and before the Dodd-Frank Act was enacted.

We use different dependent variables (ybq) to estimate the initial impacts 

of the new requirements for SIFIs on the cost of credit provided by bank 

SIFIs and on various aspects of bank SIFIs’ safety and soundness, 

including capital adequacy, asset quality, earnings, and liquidity.

Appendix VII: Econometric Analyses of the 

Impact of Enhanced Regulation and 

Oversight on SIFIs

Methodology 
Appendix VII: Econometric Analyses of the 

Impact of Enhanced Regulation and Oversight 

on SIFIs

Page 118 GAO-14-67 Dodd-Frank Regulations

• Funding cost. A bank holding company’s funding cost is the cost of 

deposits or liabilities that it then uses to make loans or otherwise 

acquire assets. More specifically, a bank holding company’s funding 

cost is the interest rate it pays when it borrows funds. All else being 

equal, the greater a bank holding company’s funding cost, the greater 

the interest rate it charges when it makes loans. We measure funding 

cost as an institution’s interest expense as a percentage of interestbearing liabilities.

• Capital adequacy. Capital absorbs losses, promotes public 

confidence, helps restrict excessive asset growth, and provides 

protection to creditors. We use two alternative measures of capital 

adequacy: tangible common equity as a percentage of total assets 

and tangible common equity as a percentage of risk-weighted assets.

• Asset quality. Asset quality reflects the quantity of existing and 

potential credit risk associated with the institution’s loan and 

investment portfolios and other assets, as well as off-balance sheet 

transactions. Asset quality also reflects the ability of management to 

identify and manage credit risk. We measure asset quality as 

performing assets as a percentage of total assets, where performing 

assets are equal to total assets less assets 90 days or more past due 

and still accruing interest, assets in non-accrual status, and other real 

estate owned.

• Earnings. Earnings are the initial safeguard against the risks of 

engaging in the banking business and represent the first line of 

defense against capital depletion that can result from declining asset 

values. We measure earnings as net income as a percentage of total 

assets.

• Liquidity. Liquidity represents the ability to fund assets and meet 

obligations as they become due, and liquidity risk is the risk of not 

being able to obtain funds at a reasonable price within a reasonable 

time period to meet obligations as they become due. We use two 

different variables to measure liquidity. The first variable is liquid 

assets as a percentage of volatile liabilities. This variable is similar in 

spirit to the liquidity coverage ratio introduced by the Basel Committee 

on Banking Supervision and measures a bank holding company’s 

capacity to meet its liquidity needs under a significantly severe 

liquidity stress scenario. We measure liquid assets as the sum of cash 

and balances due from depository institutions, securities (less pledged 

securities), federal funds sold and reverse repurchases, and trading 

assets. We measure volatile liabilities as the sum of federal funds 

purchased and repurchase agreements, trading liabilities (less 

derivatives with negative fair value), other borrowed funds, deposits 

held in foreign offices, and large time deposits held in domestic 

offices. Large time deposits are defined as time deposits greater than 
Appendix VII: Econometric Analyses of the 

Impact of Enhanced Regulation and Oversight 

on SIFIs

Page 119 GAO-14-67 Dodd-Frank Regulations

$100,000 prior to March 2010 and as time deposits greater than 

$250,000 in and after March 2010.

The second liquidity variable is stable liabilities as a percentage of 

total liabilities. This variable measures the extent to which a bank 

holding company relies on stable funding sources to finance its assets 

and activities. This variable is related in spirit to the net stable funding 

ratio introduced by the Basel Committee on Banking Supervision, 

which measures the amount of stable funding based on the liquidity 

characteristics of an institution’s assets and activities over a 1 year 

horizon. We measure stable funding as total liabilities minus volatile 

liabilities as described earlier.

Finally, we include a limited number of independent variables (Xbq) to 

control for factors that may differentially affect SIFIs and non-SIFIs in the 

quarters since the Dodd-Frank Act was enacted. We include these 

variables to reduce the likelihood that our estimates of the impact of new 

requirements for SIFIs are reflecting something other than the impact of 

the Dodd-Frank Act’s new requirements for SIFIs.

• Nontraditional income. Nontraditional income generally captures 

income from capital market activities. Bank holding companies with 

more nontraditional income are likely to have different business 

models than those with more income from traditional banking 

activities. Changes in capital markets in the period since the DoddFrank Act was enacted may have had a greater effect on bank holding 

companies with more nontraditional income. If bank SIFIs typically 

have more nontraditional income than other bank holding companies, 

then changes in capital markets in the time since the Dodd-Frank Act 

was enacted may have differentially affected the two groups. We 

measure nontraditional income as the sum of trading revenue; 

investment banking, advisory, brokerage, and underwriting fees and 

commissions; venture capital revenue; insurance commissions and 

fees; and interest income from trading assets less associated interest 

expense, and we express nontraditional income as a percentage of 

operating revenue.

• Securitization income. Bank holding companies with more income 

from securitization are likely to have different business models than 

those with more income from traditional banking associated with an 

originate-to-hold strategy for loans. Changes in the market for 

securitized products in the period since the Dodd-Frank Act was 

enacted may thus have had a greater effect on bank holding 

companies with more securitization income. If bank SIFIs typically 

have more securitization income than other bank holding companies, 

then changes in the market for securitized products in the time since 
Appendix VII: Econometric Analyses of the 

Impact of Enhanced Regulation and Oversight 

on SIFIs

Page 120 GAO-14-67 Dodd-Frank Regulations

the Dodd-Frank Act was enacted may have differentially affected the 

two groups. We measure securitization income as the sum of net 

servicing fees, net securitization income, and interest and dividend 

income on mortgage-backed securities minus associated interest 

expense, and we express securitization as a percentage of operating 

revenue. Operating revenue is the sum of interest income and 

noninterest income less interest expense and loan loss provisions.

• Foreign exposure. Changes in other countries, such as the 

sovereign debt crisis in Europe, may have a larger effect on bank 

holding companies with more foreign exposure. If bank SIFIs typically 

have more foreign exposure than other bank holding companies, then 

changes in foreign markets may have differentially affected the two 

groups. We measure foreign exposure as the sum of foreign debt 

securities (held-to-maturity and available-for-sale), foreign bank loans, 

commercial and industrial loans to non-U.S. addresses, and foreign 

government loans. We express foreign exposure as a percentage of 

total assets.

• Size. We include size because bank SIFIs tend to be larger than other 

bank holding companies, and market pressures or other forces not 

otherwise accounted for may have differentially affected large and 

small bank holding companies in the time since the Dodd-Frank Act 

was enacted. We measure the size of a bank holding company as the 

natural logarithm of its total assets.

• CPP participation. We control for whether or not a bank holding 

company participated in the Capital Purchase Program (CPP) 

component of the Troubled Asset Relief Program (TARP) to 

differentiate any impact that this program may have had from the 

impact of the Dodd-Frank Act.

We also conducted several sets of robustness checks:

• We restricted our sample to the set of institutions with assets that are 

“close” to the $50 billion cutoff for enhanced prudential regulation for 

bank SIFIs. Specifically, we analyzed two restricted samples of bank 

holding companies: (1) bank holding companies with assets between 

$25 billion and $75 billion and (2) bank holding companies with assets 

between $1 billion and $100 billion.

• We examined different treatment start dates. Specifically, we allowed 

the Dodd-Frank Act’s new requirements for SIFIs to have an impact in 

2009 quarter 3, 1 year prior to the passage of the act. We did so to 

allow for the possibility that institutions began to react to the act’s 

requirements in anticipation of the act being passed.
Appendix VII: Econometric Analyses of the 

Impact of Enhanced Regulation and Oversight 

on SIFIs

Page 121 GAO-14-67 Dodd-Frank Regulations

• We analyzed alternative measures of capital adequacy, including 

equity capital as a percentage of total assets and Tier 1 capital as a 

percentage of risk-weighted assets.

• We allowed the effect of the treatment to vary by quarter.

We conducted our analysis using quarterly data on bank holding 

companies that filed form FR Y-9C obtained from the Federal Reserve 

Bank of Chicago for the period from the first quarter of 2006 to the second 

quarter of 2013.

Our econometric analysis assesses the initial impact of the Dodd-Frank 

Act’s new requirements for bank SIFIs on (1) the cost of credit they 

provide and (2) their safety and soundness. Our analysis leverages the 

Dodd-Frank Act’s requirement that bank holding companies with total 

consolidated assets of $50 billion or more are subject to enhanced 

regulation by the Federal Reserve but other bank holding companies are 

not by comparing funding costs, capital adequacy, asset quality, earnings, 

and liquidity for bank SIFIs and non-SIFI bank holding companies before 

and after the implementation of the enhanced prudential requirements. All 

else being equal, the difference in the comparative differences is the 

inferred effect of the Dodd-Frank Act on bank SIFIs. While some of the 

SIFI-related rulemakings have yet to be finalized, our estimates are 

suggestive of the initial effects of the Dodd-Frank Act on bank SIFIs and 

provide a baseline against which to compare future results.1

Our baseline estimates suggest that the Dodd-Frank Act has not been 

associated with a significant change in U.S. bank SIFIs’ funding costs 

(table 12). To the extent that the cost of credit provided by bank SIFIs is a 

function of their funding costs, the new requirements for SIFIs are likely to 

have had little effect on the cost of credit to date.

 

1

See appendix V for the rulemaking status of the enhanced prudential standards. 

Data

Results 
Appendix VII: Econometric Analyses of the 

Impact of Enhanced Regulation and Oversight 

on SIFIs

Page 122 GAO-14-67 Dodd-Frank Regulations

Table 12: Estimated Changes in U.S. Bank SIFIs’ Funding Costs and Measures of Safety and Soundness Associated with the 

Dodd-Frank Act, from Third Quarter 2010 through Second Quarter 2013

Estimated change (percentage points)

Variable Measured as Baseline

Sample restricted 

to BHCs with 

assets $25-75

billion

Sample restricted 

to BHCs with 

assets $1 billion100 billion

Impact of DFA 

anticipated 

enactment by 

1 year

Funding cost

(cost of credit)

Interest expense as a 

percentage of interest-bearing 

liabilities

0.02

(0.02)

[0.92]

-0.01

(0.04)

[0.88]

-0.02

(0.02)

[0.93]

-0.03

(0.02)

[0.92]

Capital adequacy

(safety and 

soundness)

Tangible common equity as a 

percentage of total assets

1.50**

(0.22)

[0.07]

0.27

(0.69)

[0.43]

1.16**

(0.24)

[0.10]

1.58**

(0.24)

[0.07]

Tangible common equity as a 

percentage of risk-weighted 

assets

2.02**

(0.36)

[0.11]

0.17

(0.92)

[0.52]

1.12**

(0.31)

[0.17]

2.21**

(0.38)

[0.12]

Asset quality

(safety and 

soundness)

Performing assets as a 

percentage of total assets

0.41**

(0.13)

[0.30]

1.08

(0.58)

[0.72]

0.60**

(0.17)

[0.34]

0.37**

(0.14)

[0.30]

Earnings

(safety and 

soundness)

Net income as a percentage of 

total assets

0.09**

(0.03)

[0.15]

0.06

(0.12)

[0.29]

0.11**

(0.05)

[0.15]

0.14**

(0.03)

[0.15]

Liquidity

(safety and 

soundness)

Liquid assets as a percentage 

of short-term liabilities

-1.80

(8.87)

[0.25]

49.23**

(15.77)

[0.45]

-5.11

(14.56)

[0.27]

9.12

(9.23)

[0.25]

Long-term liabilities as a 

percentage of total liabilities

5.12**

(1.01)

[0.26]

2.81

(1.65)

[0.72]

4.62**

(1.77)

[0.34]

6.11**

(1.03)

[0.26]

Number of observations 30,124 478 13,169 30,124

Number of bank holding companies 1,424 31 681 1,424

Source: GAO analysis of data from the Federal Reserve Bank of Chicago.

Notes: We analyzed data for top-tier bank holding companies that filed form FR Y-9C from the first 

quarter of 2006 through the second quarter of 2013. We estimated the effects of the new SIFI 

requirements on bank SIFIs by regressing the variables listed in the table on indicators for each bank 

holding company, indicators for each quarter, indicators for whether a bank holding company is a SIFI 

for quarters from the third in 2010 through the second in 2013, and other variables controlling for size, 

foreign exposure, securitization income, other nontraditional income, and participation in the Troubled 

Asset Relief Program. Estimated changes are the coefficients on the indicators for whether a bank 

holding company is a SIFI in quarters from the third in 2010 through the second in 2013. We used ttests to assess whether the coefficient on the SIFI indicator was significant at the 5 percent level. 

**=estimate is statistically significant at the 5 percent level. Parentheses contain the standard errors 

of the estimated changes. Square brackets contain the within R-squareds for each regression.
Appendix VII: Econometric Analyses of the 

Impact of Enhanced Regulation and Oversight 

on SIFIs

Page 123 GAO-14-67 Dodd-Frank Regulations

Our baseline estimates also suggest that the Dodd-Frank Act is 

associated with improvements in most measures of U.S. bank SIFIs’ 

safety and soundness. Bank SIFIs appear to be holding more capital than 

they otherwise would have held in every quarter since the Dodd-Frank 

Act was enacted (see “Baseline” column in table 12). The quality of 

assets on the balance sheets of bank SIFIs also seems to have improved 

since the Dodd-Frank Act was enacted. The act is associated with higher 

earnings for bank SIFIs in the time period after the act’s enactment. It is 

also associated with improved liquidity as measured by the extent to 

which a bank holding company is using stable sources of funding. The 

only measure that has not clearly improved since the act’s enactment was 

liquidity as measured by the capacity of a bank holding company’s liquid 

assets to cover its volatile liabilities. Thus, the Dodd-Frank Act appears to 

be broadly associated with improvements in most indicators of safety and 

soundness for U.S. bank SIFIs (relative to non-SIFI bank holding 

companies).

Our approach allows us to partially differentiate changes in funding costs, 

capital adequacy, asset quality, earnings, and liquidity associated with the 

Dodd-Frank Act from changes due to other factors. However, several 

factors make isolating and measuring the impact of the Dodd-Frank Act’s 

new requirements for SIFIs challenging. The effects of the act cannot be 

differentiated from the effects of simultaneous changes in economic 

conditions, such as the pace of the recovery from the recent recession, or 

regulations, such as those stemming from Basel III, or other changes, 

such as in credit ratings that differentially may affect bank SIFIs and other 

bank holding companies. In addition, some of the new requirements for 

SIFIs have yet to be implemented. Nevertheless, our estimates are 

suggestive of the initial effects of the Dodd-Frank Act on bank SIFIs and 

provide a baseline against which to compare future trends.

The results of our robustness checks are as follows:

• Our results for funding costs are generally robust to restricting the set 

of bank holding companies we analyze to those with assets of $25 

billion-$75 billion, but our results for capital adequacy, asset quality, 

earnings, and liquidity are not.

• Our results are generally robust to restricting the set of bank holding 

companies we analyze to those with assets of $1 billion-$100 billion.

• Our results are generally robust to starting the treatment in the third 

quarter of 2009, 1 year prior to the passage of the Dodd-Frank Act. 

This finding is consistent with the idea that bank holding companies 

began to change their behavior in anticipation of the act’s 
Appendix VII: Econometric Analyses of the 

Impact of Enhanced Regulation and Oversight 

on SIFIs

Page 124 GAO-14-67 Dodd-Frank Regulations

requirements, perhaps as information about the content of the act 

became available and the likelihood of its passage increased. 

However, there may be other explanations, including anticipation of 

Basel III requirements, reactions to stress tests, and market pressures 

to improve capital adequacy and liquidity.

• Our results for the impact on capital adequacy are generally similar 

when we measure capital adequacy using Tier 1 capital as a 

percentage of assets or risk-weighted assets but not when we 

measure capital adequacy using equity capital as a percentage of 

assets (see table 13).

Table 13: Estimated Changes in Bank SIFIs’ Capital Adequacy Indicators 

Associated with the Dodd-Frank Act, from Third Quarter 2010 through Second 

Quarter 2013

Capital adequacy measured as: Estimated change (percentage 

points)

Total bank holding company equity as a 

percentage of total assets

0.58

(0.30)

[0.04]

Tier 1 capital as a percentage of total assets 0.82**

(0.23)

[0.04]

Tier 1 capital as a percentage of risk-weighted 

assets

0.99**

(0.34)

[0.10]

Number of observations 30,124

Number of bank holding companies 1,424

Source: GAO analysis of data from the Federal Reserve Bank of Chicago.

Notes: We analyzed data for top-tier bank holding companies that filed form FR Y-9C from the first 

quarter of 2006 through the second quarter of 2013. We estimated the effects of the new SIFI 

requirements on bank SIFIs by regressing the variables listed in the table on indicators for each bank 

holding company, indicators for each quarter, indicators for whether a bank holding company is a SIFI 

for quarters from the third in 2010 through the second in 2013, and other variables controlling for size, 

foreign exposure, securitization income, other nontraditional income, and participation in the Troubled 

Asset Relief Program. Estimated changes are the coefficients on the indicators for whether a bank 

holding company is a SIFI in quarters from the third in 2010 through the second in 2013. We used ttests to assess whether the coefficient on the SIFI indicator was significant at the 5 percent level. 

**=estimate is statistically significant at the 5 percent level. Parentheses contain the standard errors 

of the estimated changes. Square brackets contain the within R-squareds for each regression.

• Our results are generally robust to allowing the treatment effect to 

vary by quarter (see table 14).
Appendix VII: Econometric Analyses of the 

Impact of Enhanced Regulation and Oversight 

on SIFIs

Page 125 GAO-14-67 Dodd-Frank Regulations

Table 14: Estimated Changes in Bank SIFIs’ Funding Cost and Safety and Soundness Indicators Associated with the DoddFrank Act, from Third Quarter 2010 through Second Quarter 2013

Estimated change (percentage points)

2010 2011 2012 2013

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Interest expense as 

a percentage of 

interest-bearing 

liabilities

-0.02

(0.02)

0.01

(0.02)

0.02

(0.02)

0.02

(0.02)

0.01

(0.02)

0.01

(0.02)

0.03

(0.02)

0.04**

(0.02)

0.04

(0.02)

0.01

(0.03)

0.04**

(0.02)

0.04**

(0.02)

Tangible common 

equity as a 

percentage of total 

assets

1.06**

(0.20)

1.46**

(0.22)

1.46**

(0.23)

1.37**

(0.23)

1.32**

(0.23)

1.43**

(0.24)

1.66**

(0.22)

1.60**

(0.26)

1.52**

(0.25)

1.63**

(0.26)

1.70**

(0.27)

1.89**

(0.27)

Tangible common 

equity as a 

percentage of riskweighted assets

1.62**

(0.30)

2.14**

(0.35)

2.06**

(0.37)

1.90**

(0.37)

1.81**

(0.35)

1.88**

(0.40)

2.03**

(0.38)

2.09**

(0.47)

2.05**

(0.46)

2.27**

(0.46)

1.98**

(0.42)

2.45**

(0.42)

Performing assets as 

a percentage of total 

assets

0.38**

(0.14)

0.45**

(0.13)

0.45**

(0.14)

0.54**

(0.13)

0.52**

(0.13)

0.41**

(0.14)

0.45**

(0.13)

0.46**

(0.15)

0.39**

(0.15)

0.35**

(0.17)

0.29

(0.16)

0.26

(0.16)

Net income as a 

percentage of total 

assets

0.13**

(0.04)

0.22**

(0.05)

0.13**

(0.03)

0.12**

(0.04)

0.11**

(0.04)

0.03

(0.10)

0.05

(0.04)

0.02

(0.03)

0.05

(0.04)

0.10

(0.06)

0.07

(0.05)

-0.06

(0.11)

Liquid assets as a 

percentage of shortterm liabilities

6.34

(6.67)

6.81

(6.89)

-1.83

(7.24)

0.24

(7.60)

4.24

(8.70)

-2.88

(9.71)

-3.52

(11.30)

-3.41

(10.95)

-1.85

(12.09)

-9.86

(12.27)

-14.11

(11.84)

-6.07

(12.02)

Long-term liabilities 

as a percentage of 

total liabilities

3.82**

(0.87)

3.94**

(0.93)

3.36**

(1.03)

4.14**

(1.02)

5.72**

(1.08)

6.13**

(1.20)

5.64**

(1.24)

5.85**

(1.19)

5.85**

(1.21)

5.94**

(1.23)

5.56**

(1.26)

6.15**

(1.25)

Number of observations 30,124

Number of bank holding companies 1,424

Source: GAO analysis of data from the Federal Reserve Bank of Chicago.

Notes: We analyzed data for top-tier bank holding companies that filed form FR Y-9C from the first 

quarter of 2006 through the second quarter of 2013. We estimated the effects of the new SIFI 

requirements on bank SIFIs by regressing the variables listed in the table on indicators for each bank 

holding company, indicators for each quarter, indicators for whether a bank holding company is a SIFI 

in each quarter from the third in 2010 through the second in 2013, and other variables controlling for 

size, foreign exposure, securitization income, other nontraditional income, and participation in the 

Troubled Asset Relief Program. Estimated changes are the coefficients on the indicators for whether 

a bank holding company is a SIFI in quarters from the third in 2010 through the second in 2013. We 

used t-tests to assess whether the coefficient on the SIFI indicator was significant at the 5 percent 

level. **=estimate is statistically significant at the 5 percent level. Parentheses contain the standard 

errors of the estimated changes. Square brackets contain the within R-squareds for each regression.
Appendix VIII: Dodd-Frank Rules Implementing 

Central Clearing, Capital, and Margin Swap 

Reforms

Page 126 GAO-14-67 Dodd-Frank Regulations

The following tables list select Dodd-Frank rules that implement sections 

of Title VII related to central clearing requirements for swaps and securitybased swaps, and margin and capital requirements for swaps entities, as 

of November 15, 2013.

Table 15: Select Dodd-Frank Rules Implementing Central Clearing Swap Reforms 

Final as of November 15, 2013

Rulemaking 

Responsible 

regulator

Published 

date 

Effective 

date 

Process for Review of Swaps for Mandatory 

Clearing

CFTC 7/25/2011 9/26/2011

DCO operations, standards, and risk 

management

CFTC 11/8/2011 1/9/2012

Derivatives Clearing Organization General 

Provisions and Core Principles

CFTC 11/8/2011 1/9/2012

Customer Clearing Documentation, Timing of 

Acceptance for Clearing, and Clearing 

Member Risk Management

CFTC 4/9/2012 10/1/2012

Process for Submissions for Review of 

Security-Based Swaps for Mandatory 

Clearing and Notice Filing Requirements for 

Clearing Agencies

SEC 7/13/2012 8/13/2012

End-User Exception to the Clearing 

Requirement for Swaps

CFTC 7/19/2012 9/17/2012

Swap Transaction Compliance and 

Implementation Schedule: Clearing 

Requirement under Section 2(h) of the CEA

CFTC 7/30/2012 9/28/2012

Clearing Agency Standards SEC 11/22/2012 1/2/2013

Clearing Requirement Determination Under 

Section 2(h) of the CEA

CFTC 12/13/2012 2/11/2013

Clearing Exemption for Swaps Between 

Certain Affiliated Entities

CFTC 4/11/2013 6/10/2013

Source: GAO analysis of Dodd-Frank Act, Federal Register documents.

Note: SEC has not yet proposed rules requiring central clearing for any security-based swap.

Appendix VIII: Dodd-Frank Rules 

Implementing Central Clearing, Capital, and 

Margin Swap Reforms 
Appendix VIII: Dodd-Frank Rules Implementing 

Central Clearing, Capital, and Margin Swap 

Reforms

Page 127 GAO-14-67 Dodd-Frank Regulations

Table 16: Select Dodd-Frank Rules Implementing Capital and Margin Swap Reforms 

Proposed as of November 15, 2013

Rulemaking 

Responsible 

regulator

Rule 

status 

Published 

date 

Margin Requirements for Uncleared 

Swaps for Swap Dealers and Major 

Swap Participants

CFTC Proposed 4/28/2011

Margin and Capital Requirements for 

Covered Swap Entities

FCA, FDIC, 

FHFA, FRS, 

OCC

Proposed 5/11/2011

Capital Requirements of Swap 

Dealers and Major Swap Participants

CFTC Proposed 5/12/2011

Swap Transaction Compliance and 

Implementation Schedule: Trading 

Documentation and Margining 

Requirements under Section 4s of the 

CEA

CFTC Proposed 9/20/2011

Capital, Margin, and Segregation 

Requirements for Security-Based 

Swap Dealers and Major SecurityBased Swap Participants and Capital 

Requirements for Broker-Dealers; 

Proposed Rule

SEC Proposed 11/23/2012

Source: GAO analysis of Dodd-Frank Act and Federal Register documents.
Appendix IX: Comments from the Financial 

Stability Oversight Council

Page 128 GAO-14-67 Dodd-Frank Regulations

Appendix IX: Comments from the Financial 

Stability Oversight Council
Appendix IX: Comments from the Financial 

Stability Oversight Council

Page 129 GAO-14-67 Dodd-Frank Regulations
Appendix X: Comments from the National 

Credit Union Administration

Page 130 GAO-14-67 DODD Frank Regulations

Appendix X: Comments from the National 

Credit Union Administration
Appendix XI: GAO Contact and 

Acknowledgments

Page 131 GAO-14-67 DODD Frank Regulations

A. Nicole Clowers, (202) 512-8678, clowersa@gao.gov

In addition to the contact named above, Richard Tsuhara (Assistant 

Director), Silvia Arbelaez-Ellis, Timothy Bober, William R. Chatlos, 

Jeremy Conley, Rachel DeMarcus, Courtney LaFountain, Thomas 

McCool, Marc Molino, Patricia Moye, Barbara Roesmann, and Susan 

Offutt made key contributions to this report.

Appendix XI: GAO Contact and 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 

(250694)
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