Regulation

Overview of Financial Regulation

Regulation Overview: Regulation of the financial services industry is highly complicated, involving a variety of federal and state agencies. It has been described as "Balkanized" by some observers, including regulators themselves. In many cases, a particular financial services firm may be responsible to several of these agencies, which have independent agendas. Here is a summary of financial regulation.

By regulatory body:

FDIC

• Insures deposits at banks and thrifts
• Requires insurance for industrial loan companies such as GMAC

Federal Reserve

• All national banks and some state banks
• Regulates industrial loan companies such as GMAC
• Regulates bank holding companies

Office of Thrift Supervision (OTS)

• Regulates thrifts, protecting consumers and encouraging competition

Office of the Comptroller of the Currency

• Regulates national banks

SEC

• Sets national disclosure standards for securities
• Regulates securities exchanges, such as the NYSE
• Regulates some futures clearinghouses

National Credit Union Administration

• Regulates credit unions

Commodity Futures Trading Commission (CFTC)

• Regulates futures exchanges, such as the Chicago Mercantile Exchange

Department of Labor

• Regulates insurance companies by setting standards for employee benefit plans

State Regulatory Agencies

• Regulate state-chartered banks and thrifts
• Regulate securities with investor protection "blue sky laws"
• Charter industrial loan companies such as GMAC
• Regulate insurance companies to protect consumers and guard against insolvencies

By type of financial services company:

Banks

• FDIC
• Office of the Comptroller of the Currency
• Federal Reserve (all national banks and some state-chartered banks)
• State Regulatory Agencies

Bank Holding Companies

• Federal Reserve

Thrifts

• Office of Thrift Supervision (OTS)
• FDIC
• State Regulatory Agencies (state-chartered thrifts)

Credit Unions

• National Credit Union Administration

Industrial Loan Companies (such as GMAC)

• Federal Reserve
• FDIC
• State Regulatory Agencies (from the states chartering the companies)

Securities Exchanges and Securities

• SEC
• State Regulatory Agencies

Insurance Companies

• State Regulatory Agencies
• Department of Labor

Futures Exchanges and Clearinghouses

• SEC
• Commodity Futures Trading Commission (CFTC)