GAO: Congress Should Address Fragmentation and Overlap of Financial Regulation

The Government Accountability Office (GAO) on March 6 issued a report recommending Congress may want to consider options to address inefficiencies that hamper the financial regulatory system.

The report is part of GAO's High Risk Series.

In February 2016, GAO reported that fragmentation and overlap in the financial regulatory structure have created inefficiencies in regulatory processes and inconsistencies in how regulators oversee similar types of institutions.

GAO in its March 2019 report stated that Congressional action is needed to address this fragmentation and overlap in the regulatory structure.

GAO wrote:

"Congress should consider whether additional changes to the financial regulatory structure are needed to reduce or better manage fragmentation and overlap in the oversight of financial institutions and activities to improve (1) the efficiency and effectiveness of oversight; (2) the consistency of consumer and investor protections; and (3) the consistency of financial oversight for similar institutions, products, risks, and services."

For example, GAO suggested these objectives could be achieved by consolidating the number of federal agencies involved in overseeing the safety and soundness of depository institutions.