According to ICBA (Independent Community Bankers of America), Most Financial Regulators Operating Despite Shutdown
Wednesday, October 02, 2013
Despite the partial federal government shutdown that began Tuesday, most federal financial regulators will continue normal operations because they are not funded by annual congressional appropriations.
The FDIC, Office of the Comptroller of the Currency and Consumer Financial Protection Bureau will not be directly affected by the shutdown. The FDIC receives its funding from industry premiums and the Deposit Insurance Fund, the OCC from the fees it charges banks, and the CFPB from earnings from Federal Reserve operations. The Federal Reserve is funded by the interest it earns on its securities holdings. Fannie Mae and Freddie Mac operate as private companies even in conservatorship and are not affected.
The same does not go for the Securities and Exchange Commission, the Federal Housing Administration and the Commodity Futures Trading Commission, which are funded by congressional spending bills. The Los Angeles Times reported that the SEC and FHA are operating temporarily under previously authorized funding, while the CFTC plans to furlough 96 percent of its employees. Further, if the shutdown continues for several weeks, some rulemakings, such as a final Volcker Rule, might be delayed.
Perhaps the greatest potential impact of the shutdown on community banks and other financial institutions is lost economic growth. IHS Inc., a market research firm, estimates that the daily economic cost of a federal shutdown will start at $300 million a day and accelerate as it continues, Bloomberg News reported.
The federal government shut down Tuesday as Congress was unable to reach a budget deal to authorize discretionary spending for fiscal 2014. Negotiations continue.
- Trackback Link
- Post has no trackbacks.