Reg Relief Realities: What Now and What Next?
Continuity’s Regulatory Operations Center™(ROC)'s insights on tips and techniques for coping with regulatory relief and what it means for your institution. Whether you’re large or small, and no matter what kind of financial services entity your organization is, there are some consistent steps you can take toward compliance, from the moment you learn a new law has been signed through the validation that your implementation was effective.
Part 1: Keep Calm and Plan Your Strategy
On May 24, 2018, President Trump signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act. The Act consists of six Titles, each with between 1 and 13 sections. Its purpose statement indicates the law was enacted to “promote economic growth, provide tailored regulatory relief, and enhance consumer protections, and for other purposes.”
Sections of the Act bear various effective dates, ranging from as soon as “upon enactment” (05/24/2018) to dates as far as three years from the date of enactment (05/24/2021). But a regulatory relief bill behaves unlike traditional rulemaking when it comes to effective dates. Usually, an effective date represents a ‘deadline’ by which all implementation tasks must be accomplished. In the case of regulatory relief, the effective date(s) represent the time by which a burden must be reduced. So much remains unanswered with respect to when compliance is expected, required or optional.
Knowing When to Take Action
In circumstances like this, there are three basic scenarios to consider when prioritizing change implementation strategies and tasks. Recognize that not all of the variables are always known up front. In many cases, there is a waiting period between the time the Act goes into effect and the time the regulations to implement that Act can be written. Even when there is not, there may be already-in-place rules that conflict with or
- There is no existing regulation currently in place.
- There is an existing regulation that is more onerous than the new provision.
- There is an existing regulation that is less burdensome than the new provision.
And in each of these scenarios, there are two basic questions to ask. Each is a different spin on when MAY we comply, and when MUST we comply?
- May we comply now, or must we wait for a regulation to be written?
- Must we comply now, or may we wait for a regulation to be written?
Following the development of regulations requires an organization to know:
- Which supervisory agencies are responsible for writing or updating regulations to conform to the Act?
- What are thier deadlines for doing so? Is the rulemaking body my primary regulator? If not, what is my regulator’s stance (as expressed in official guidance or exam procedures)?
Making Sense of the Structure
Part of the change implementation process is understanding the 5 W’s (and an H) of each provision.
- Why is a change being made?
- What, specifically, is changing?
- When does the change become effective?
- Where in my organization will impacts be felt?
- Who will need to implement the change?
- How will we define and complete the implementation tasks?
Remember that for each change, you’ll need to outline the process steps needed in all aspects of your compliance management system (CMS).