GAO study: Regulators did not adequately follow OMB guidance in cost-benefit analyses

200px-US-GovernmentAccountabilityOffice-Logo.svgA December study by the Government Accountability Office revealed that federal regulators did not consistently follow guidance on cost-benefit analyses from the Office of Management and Budget when they examined Dodd-Frank rules.

Most federal regulators are considered independent government agencies and are not subject to executive orders that mandate comprehensive cost-benefit analyses under OMB guidelines. The GAO study found that while regulators considered the costs and benefits of Dodd-Frank rules, they “did not quantify or monetize” the potential risks and benefits, Point of Law reports.

Additionally, the GAO report found that financial regulators “continue to lack formal policies and procedures to guide interagency coordination,” which was recommended by the agency in a previous report.

Government agencies coordinated on 19 of 54 regulations reviewed by the GAO. Though Dodd-Frank mandated coordination for most of the 19 rules, regulators also coordinated with other U.S. agencies and international regulators on some of the rules. The review also found that “differences between related rules may remain even when coordination occurs,” though regulators maintain that the conflicts arise due to differences in markets and jurisdictions, according to Point of Law.

The GAO did not make any recommendations in the report but instead reiterated its 2011 recommendations that federal regulators more fully follow OMB guidance on cost-benefit analyses, adding that the Financial Stability Oversight Council should work with regulators to establish formal interagency coordination.

One Response to GAO study: Regulators did not adequately follow OMB guidance in cost-benefit analyses

  1. While they call the process “rulemaking,” the regulatory agencies create and enforce “rules” that are truly laws, many with the potential to profoundly effect the lives and livelihoods of millions of Americans. What controls and oversight are placed on the regulatory agencies in creating the federal regulations?