US Regulatory Bodies. Which are the Main One and What They Do? - YouTube

Are you trying to make sense and navigate the complex US regulatory body system?

In this video I'll provide you with an overview of the main US regulatory bodies that exist,

what are their key responsibilities and which financial services sector they support.

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Now let's jump right into, today's video.

Hi, I'm Marco Beranzoni and this is FinCrime Agent my YouTube channel where every week

I publish a new video to boost your awareness about AML and Financial Crime prevention.

Financial markets and corporations are regulated and supervised by a multitude of federal and

regulatory bodies.

These organisations each have their own set of tasks and obligations, allowing them to

function independently while pursuing more broadly similar goals.

Depending on the level of discussion you are having with different people, the usefulness,

or even the actual need to have in place some of these agencies can be challenged.

But is important to know that each US regulatory body was originally created with a specific

purpose in mind and will most certainly continue to exist and operate for some time.

In light of this, today I will provide you with an overview of several US regulatory

bodies that operate in the financial sector within the United States.

At the federal level, regulators can be clustered in the following areas:

Depository regulators— those are: Office of the Comptroller of the Currency

(OCC), Federal Deposit Insurance Corporation (FDIC),

Federal Reserve for banks; and National Credit Union Administration for

credit unions; Then we have two Securities markets regulators,

those are: Securities and Exchange Commission (SEC) and

Commodity Futures Trading Commission (CFTC); The third group is the Government-sponsored

enterprise (GSE) regulators - those are: Federal Housing Finance Agency and the Farm

Credit Administration; And lastly one Consumer protection regulator-

which is: The Consumer Financial Protection Bureau.

As part of this video I will drill down only on the role of Depository regulators and Securities

markets regulators.

If you also want to learn more about Government-sponsored enterprise and Consumer protection regulators,

I invite you to read the Congressional Research Service document linked in the video description

as this is the official documentation that I am using as reference for today's video.

Ok, let's start with the Federal Reserve, this US regulatory body is one of the most

well-known regulatory agencies in the world.

The Fed regulates the largest, most complex financial firms operating in the United States.

The Fed serves as the umbrella regulator for financial holding companies and is the primary

regulator of all non-bank financial firms that are designated as systemically significant,

by the Financial Stability Oversight Council, of which the Fed is a member.

All banks with more than $50 billion in assets and designated non-banks, are subject to enhanced

prudential regulation by the Fed.

In addition, the Fed is the principal regulator for savings and loan holding companies and

securities holding companies, a new category of institution formerly defined in securities

law as an investment bank holding company.

The Fed’s responsibilities are not limited to regulation.

As the nation’s central bank, it conducts monetary policy by targeting short-term interest

rates.

The Fed also acts as a “lender of last resort” by making short-term collateralized

loans to banks through the discount window.

It also operates some parts and regulates other parts

of the payment system.

Is also worth noting that Title VIII of the Dodd-Frank Act gave the Fed additional authority

to set prudential standards for payment systems that have been designated as systemically

important.

Let's now talk about the Office of the Comptroller of the Currency.

The OCC was created in 1863 as part of the Department of the Treasury to supervise federally

chartered banks.

The OCC regulates a wide variety of financial functions, but only for federally chartered

banks.

The head of the OCC, the Comptroller of the Currency, is also a member of the board of

the FDIC and a director of the Neighborhood Reinvestment Corporation.

The OCC has examination powers to enforce its responsibilities for the safety and soundness

of nationally chartered banks.

The OCC has strong enforcement powers, including the ability to issue cease and desist orders

and revoke federal bank charters.

Let's now see the third Depository regulators included in our list of US regulatory bodies.

This is the Federal Deposit Insurance Corporation.

Following bank panics during the Great Depression, the FDIC was created in 1933 to provide assurance

to small depositors that they would not lose their savings if their bank failed.

The FDIC is an independent agency that insures deposits (up to $250,000 for individual accounts),

examines and supervises financial institutions, and manages receiverships, assuming and disposing

of the assets of failed banks.

The FDIC is the primary federal regulator of state banks that are not members of the

Federal Reserve System and state-chartered thrift institutions.

In addition, the FDIC has broad jurisdiction over nearly all banks and thrifts, whether

federally or state chartered, that carry a FDIC insurance.

The National Credit Union Administration is the fourth and last Depository regulator.

The NCUA, originally part of the Farm Credit Administration, became an independent agency

in 1970.

The NCUA is the safety and soundness regulator for all federal credit unions

and those state credit unions that elect to be federally insured.

It administers a Central Liquidity Facility, which is the credit union lender

of last resort, and the National Credit Union Share

Insurance Fund, which insures credit union deposits.

The NCUA also resolves failed credit unions.

For those unfamiliar with credit unions, those are member-owned financial cooperatives, and

they must be not-for-profit institutions

With the NCUA we now covered all the US regulatory bodies under the Depository regulators group.

Let's now talk about Securities markets regulators starting with the Securities and Exchange

Commission.

Following the stock market crash of 1929, the SEC was created as an independent agency

in 1934 to enforce newly written federal securities laws.

Thus, when Congress created the SEC, stock and bond market institutions and mechanisms

were already well-established, and federal regulation was grafted onto the existing structure.

The SEC is not primarily concerned with ensuring the safety and soundness of the firms it regulates,

but rather with “protecting investors, maintaining fair, orderly, and efficient

markets, and facilitating capital formation.”

The second US Securities markets regulator and the last one that I'm covering in this

session is the Commodity Futures Trading Commission.

Like the SEC, the CFTC does not directly regulate the safety and soundness of individual firms.

The CFTC’s mission is to prevent excessive speculation, manipulation of commodity prices,

and fraud.

Like the SEC, the CFTC oversees self-regulatory organizations, the futures exchanges and the

National Futures Association, and requires the registration of a range of industry firms

and personnel, including futures commission merchants (brokers), floor traders, commodity

pool operators, and commodity trading advisers.

I admit that today there were quite a lot of information to digest.

And there is even more if you want to also learn about Government-sponsored enterprise

and Consumer protection regulators.

So if you are studying or building your knowledge about US regulatory bodies the Congressional

Research Service document available from the video description will be a great reference

to start your research or study.

With that I am at the end of today's video.

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