Recommendation: The Federal Reserve should develop and implement specific policies and procedures for how it will consistently comply with RFA requirements and key aspects of Office of Advocacy and OMB guidance that include the following three elements: (1) processes for creating and maintaining documentation sufficient to support analysis of economic impact and alternatives; (2) processes for disclosing the methodology--including criteria for assessing significant economic impact and a substantial number of small entities--and data sources of economic analysis supporting certification determinations and regulatory flexibility analyses; and (3) processes for considering to the extent practicable a rule's potential economic impacts on small entities, including for evaluating broad economic impacts of regulations in certification determinations and assessing alternatives that could minimize impact on small entities. (Recommendation 5)

Agency: Federal Reserve System
Status: Open

Comments: In June 2019, Federal Reserve staff told us that they continue to review their policies and procedures to ensure compliance with RFA requirements. While Federal Reserve staff said that they use an RFA handbook developed by the SBA Office of Advocacy to support their analyses, the Federal Reserve has not made changes to its policies and procedures based on our recommendations. Until the Federal Reserve develops and implements RFA policies and procedures consistent with the recommendation, it remains open.

Recommendation: The Commodity Futures Trading Commission should develop and implement specific policies and procedures for how it will consistently comply with RFA requirements and key aspects of Office of Advocacy and OMB guidance that include the following four elements: (1) processes for creating and maintaining documentation sufficient to support analysis of economic impact and alternatives; (2) processes for disclosing the methodology--including criteria for assessing significant economic impact and a substantial number of small entities--and data sources of economic analysis supporting certification determinations and regulatory flexibility analyses; (3) processes for considering to the extent practicable a rule's potential economic impacts on small entities, including for evaluating broad economic impacts of regulations in certification determinations and assessing alternatives that could minimize impact on small entities; and (4) in developing policies and procedures for section 610 reviews, include processes for determining which rules require review, posting notices of upcoming reviews in the Federal Register, maintaining documentation supporting the analysis and conclusions of RFA-required considerations, and establishing procedures for publicly disclosing the review or summaries (such as in the Federal Register or on the agency's website). (Recommendation 8)

Agency: Commodity Futures Trading Commission
Status: Open

Comments: In June 2019, CFTC staff told us that they formed a working group to enhance its implementation of RFA requirements. While this working group has begun drafting compliance procedures for RFA reviews, the procedures are incomplete and CFTC staff said it will have to finish updating the "small entity" definition before it can complete these procedures. CFTC staff told us that the working group has focused much of its work on updating the agency's definition of "small entity" because the definition was outdated. The identification of "small entity" is an important preliminary step for RFA analysis. CFTC staff does not expect to publish a proposal to amend the "small entity" definition until the summer 2020. Until CFTC finalizes and implements the new procedures for RFA reviews, this recommendation remains open.

Recommendation: SEC should publicly disclose its section 610 reviews, or summaries of the reviews, with the basis for any conclusions. Such disclosure could include publishing results in the Federal Register or on the agency's website. (Recommendation 10)

Agency: United States Securities and Exchange Commission
Status: Open

Comments: In March 2019, SEC provided us with supplemental policies and procedures it developed for compliance with the Regulatory Flexibility Act (RFA), including section 610 reviews. The procedures require staff to publish on SEC's website a notice that section 610 reviews have been completed and, if the agency plans any further actions, a published RFA agenda would so indicate. Although these notices communicate with interested entities about the status of ongoing as well as completed section 610 reviews, they will not include any details about the basis for SEC's conclusions during the review. Therefore, they do not full implement GAO's recommendation, which remains open.