The U.S. financial regulatory structure is a complex system of multiple federal and state regulators as well as self-regulatory organizations (SRO) that operate largely along functional lines. That is, financial products or activities generally are regulated according to their function, no matter who 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 depends on the type of charter the banking institution chooses. Charter types for depository institutions include commercial banks, thrifts, and credit unions. These charters may be obtained at the state or federal level. The federal prudential banking regulators—all of which generally may issue regulations and take enforcement actions against industry participants within their jurisdiction—are identified in table 1. In addition, the Dodd-Frank Act created CFPB as an independent bureau within the Federal Reserve System that is responsible for regulating the offering and provision of consumer financial products and services under the federal consumer financial laws. Under the Dodd-Frank Act, at the designated transfer date, certain authority vested in the prudential regulators transferred to CFPB. The securities and futures industries are regulated under a combination of self-regulation (subject to oversight by the appropriate federal regulator) and direct oversight by SEC and CFTC, respectively. SEC oversees the securities industry SROs, and the securities industry as a whole, and is responsible for administering federal securities laws and developing regulations for the industry. SEC’s overall mission includes protecting investors; maintaining fair, orderly, and efficient markets; and facilitating capital formation. CFTC oversees the futures industry and its SROs. Under the Dodd-Frank Act, CFTC also has extensive responsibilities for the regulation of swaps and certain entities involved in the swaps markets. CFTC has responsibility for administering federal legislation and developing comprehensive regulations to protect the public from fraud and manipulation, to insure the financial integrity of transactions, and to reduce systemic risk in the marketplace. In addition, the Dodd-Frank Act created FSOC. FSOC’s three primary purposes are 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. FSOC consists of 10 voting members and 5 nonvoting members and is chaired by the Secretary of the Treasury. In consultation with the other FSOC members, the Secretary is responsible for regular consultation with the financial regulatory entities and other appropriate organizations of foreign governments or international organizations. The federal government uses regulation to implement public policy. Section 553 of APA contains requirements for the most common type of federal rulemaking—informal rulemaking or “notice and comment” rulemaking. While there are inter- and intra-agency variations in the informal rulemaking process, federal financial regulators generally share three basic rulemaking steps or phases: Initiation of rulemaking action. During initiation, agencies gather information that would allow them to determine whether rulemaking is needed and identify potential regulatory options. To gather information on the need for rulemaking and potential regulatory options, agencies may hold meetings with interested parties or issue an advanced notice of proposed rulemaking. At this time, the agencies also will identify the resources needed for the rulemaking and may draft concept documents for agency management that summarize the issues, present the regulatory options, and identify needed resources. Development of proposed rule. During this phase of the rulemaking process, an agency will draft the notice of proposed rulemaking, including the preamble (which is the portion of the rule that informs the public of the supporting reasons and purpose of the rule) and the rule language. The agency will begin to address analytical and procedural requirements in this phase. The agency provides “interested persons” with an opportunity to comment on the proposed rule, generally for a period of at least 30 days. Development of final rule. In the third phase, the agency repeats, as needed, the steps used during development of the proposed rule. Once the comment period closes for the proposed rule, the agency either would modify the proposed rule to incorporate comments or address the comments in the final rule release. This phase also includes opportunities for internal and external review. As published in the Federal Register, the final rule includes the date on which it becomes effective. APA’s notice and comment procedures exclude certain categories of rules, including interpretative rules; general statements of policy; rules that deal with agency organization, procedure, or practice; or rules for which the agency finds (for good cause) that notice and public comment procedures are impracticable, unnecessary or contrary to the public interest. 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 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. In many instances, exemptions to Dodd-Frank Act provisions are encompassed in definitions of certain terms that are broadly established in statute and require clarification through regulation. Persons or entities that meet the regulatory definitions are subject to the provision, and those that do not meet the definitions are not. For example, CFTC and SEC promulgated a regulation that defined the terms ‘‘swap dealer,’’ ‘‘security- based swap dealer,’’ ‘‘major swap participant,’’ ‘‘major security-based swap participant,’’ and ‘‘eligible contract participant.’’ Persons that do not meet the definitions of these terms may not be subject to the Dodd- Frank Act provisions concerning swaps and security-based swaps, including registration, margin, capital, business conduct, and other requirements. Similarly, FSOC promulgated a regulation and interpretive guidance regarding the specific criteria and analytic framework FSOC would apply in determining whether a nonbank financial company could pose a threat to the financial stability of the United States. Financial firms that are not designated by FSOC, acting pursuant to the statutory standards, would not be subject to enhanced prudential supervision by the Federal Reserve. Federal agencies conducted the regulatory analyses required by various federal statutes for all 54 Dodd-Frank Act regulations that we reviewed. As part of their analyses, the agencies generally considered, but typically did not quantify or monetize, the benefits and costs of these regulations. As independent regulatory agencies, the federal financial regulators are not subject to executive orders that require comprehensive benefit-cost analysis in accordance with guidance issued by OMB. While most financial regulators said that they attempt to follow OMB’s guidance in principle or spirit, we found that they did not consistently follow key elements of the guidance in their regulatory analyses. We previously recommended that regulators should more fully incorporate the OMB guidance into their rulemaking policies. As part of their rulemakings, federal agencies generally must conduct regulatory analysis pursuant to the Paperwork Reduction Act (PRA) and the Regulatory Flexibility Act (RFA), among other statutes.RFA require federal agencies to assess various impacts and costs of their rules, but do not require the agencies to formally assess the benefits and costs of alternative regulatory approaches or the reason for selecting one alternative over another. In addition to these requirements, authorizing or other statutes require certain federal financial regulators to consider PRA and specific benefits, costs, and impacts of their rulemakings, as the following describes. 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) further specifies that the benefits and costs shall be evaluated in light of the following five broad areas of market and public concern: (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. Under the Consumer Financial Protection Act (Title X of the Dodd- Frank 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. These include potential reductions in consumer access to products or services, the impacts on depository institutions with $10 billion or less in assets, as directed by 12 U.S.C. § 5516, and the impacts on consumers in rural areas. RFA analysis, CFPB also must describe any projected increase in the cost of credit for small entities and any significant alternatives that would minimize such increases for small entities. In addition to the protection of investors, 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. SEC also must consider the impact that any rule promulgated under the Securities Exchange Act would have on competition. This provision states that 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. 12 U.S.C.