NCUA added to‘regulatory capture’ study by GAO
June 29, 2016 -- “Regulatory capture” at NCUA, as well as three other federal financial institution regulatory agencies, is the focus of a study by the Government Accountability Office (GAO), the Wall Street Journal reported.
The probe – originally aimed at the Federal Reserve Bank of New York and the Federal Reserve system – was recently expanded to include NCUA, the OCC, and the FDIC. The original scope of the review was to determine whether the Fed’s bank supervisors are improperly influenced by Wall Street firms. However, according to the Journal, a new “work stream” was created as the study proceeded to review the other federal financial institution regulators, including NCUA.
“Regulatory capture” is defined as occurring when a regulatory agency, created to act in the public interest, instead advances the commercial or political concerns of special interest groups that dominate the industry or sector it is charged with regulating.
The original probe was begun in March, after an October request from Reps. Maxine Waters (D-Calif.) and Al Green (D-Texas), both top Democrats on the House Financial Services Committee, expressed concern with whether the Fed was too close to the institutions it supervises, the Journal reported.
The study was expanded to NCUA and the other agencies this month, according to the Journal.
A spokesman for NCUA told the Journal that “We look forward to working with GAO in its review.” The OCC and FDIC had no comment.