GAO Still Pushing for Consolidation of Financial Regulators

The Government Accountability Office has renewed its recommendation that Congress consider consolidating financial regulatory agencies, including the National Credit Union Administration, in an effort to improve oversight of financial institutions.

In its annual report issued last week on duplicative and overlapping programs, the GAO said that the fragmented organization of the regulators results in inconsistent enforcement of federal rules and consumer protection.

“Without additional actions, fragmentation and overlap in the financial regulatory structure will continue to create challenges related to the efficient and effective oversight of financial institutions and the consistency of consumer protections,” the GAO said.

GAO has made dozens of recommendations on how to eliminate overlap and duplication in the past. Its report said that since 2011, Congress has implemented 80% of them.

“At the same time, opportunities exist for achieving billions of dollars in financial savings and improving the efficiency and effectiveness of a wide range of federal programs in other areas,” the GAO said.

GAO first made its recommendations to consolidate financial regulators in 2016. At that time, the agency said a consolidation would improve the efficiency and effectiveness of oversight, as well as ensure consistency in consumer protection and the oversight of financial institutions.

“Multiple forms of overlap exist among the agencies that perform safety and soundness and consumer protection oversight of depository institutions,” the GAO said.

Several of the financial regulators simply offered technical comments about the report, but then-NCUA Executive Director Mark Treichel criticized the GAO’s recommendations, saying that the report’s “substance does not support the assertion that” the financial regulatory regime could be more effective if it were streamlined.

He said the agency could find no compelling evidence to support the contention that consolidation was a good idea. “Support for that consideration would appear to need a careful review of the costs and benefits of that action,” he said.

Since the 2016 report was issued, Congress has not attempted to consolidate the financial regulators, although many Republicans would like to decrease the power of the CFPB.


GAO 2020 Annual Report: Additional Opportunities to Reduce Fragmentation, Overlap, and Duplication and Achieve Billions in Financial Benefits.

GAO 2016 Report: Financial Regulation: Complex and Fragmented Structure Could Be Streamlined to Improve Effectiveness

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