We make more than 1,000 recommendations annually to help improve the federal government. We alert department heads to the recommendations that can save the most money, address issues on our High Risk List, or significantly improve government operations.
This report outlines our 8 priority open recommendations for the Federal Reserve as of April 2020—e.g., we recommended improving the assessment of whether the largest U.S. banks can withstand financial turmoil.
The Federal Reserve has closed 3 priority recommendations since April 2019.
To help with pandemic response, we also highlighted 3 recommendations from 2011 about emergency lending programs.
Federal Reserve System Priority Recommendations Graphic
What GAO Found
In April 2019, GAO identified 10 priority recommendations for the Board of Governors of the Federal Reserve System (Federal Reserve). Since then, the Federal Reserve has implemented 3 of those recommendations.
In April 2020, GAO identified 1 additional priority recommendation for the Federal Reserve, bringing the total number to 8. These recommendations involve the following areas:
- collaborating with other financial regulators to address consumer risks and communicating to banks that engage in third-party relationships with fintech lenders in the underwriting process
- conducting a retrospective review to help ensure that Bank Secrecy Act/anti-money laundering regulatory objectives are being met effectively and efficiently
- improving risk management of the models the Federal Reserve uses to test banks' ability to withstand financial risks and stress
The Federal Reserve's continued attention to these issues could improve its ability to more effectively oversee risks to consumers and the safety and soundness of the U.S. banking system.
Why GAO Did This Study
Priority open recommendations are the GAO recommendations that warrant priority attention from heads of key departments or agencies because their implementation could save large amounts of money; improve congressional and/or executive branch decision making on major issues; eliminate mismanagement, fraud, and abuse; or ensure that programs comply with laws and funds are legally spent, among other benefits. Since 2015 GAO has sent letters to selected agencies to highlight the importance of implementing such recommendations.
For more information, contact Michael E. Clements at (202) 512-8678 or ClementsM@gao.gov.