A Brief Description of US Financial Regulatory System

Orcun Kahyaoglu


The major regulators are Office of the Comptroller of the Currency (OCC), Office of Thrift Supervision (OTS), and National Credit Union Administration (NCUA).

What do they regulate?


Office of the Comptroller of the Currency regulates chartering, licensing, branching both intra-state and interstate, mergers-acquisitions-consolidations both intra-state and interstate, supervision and examination, prudential limits-safety-soundness and the consumer protection’s enforcements of National Banks and Federal U.S. Branches and Agencies of Foreign Banks.

Office of Thrift Supervision regulates chartering, licensing, branching both intra-state and interstate, mergers-acquisitions-consolidations both intra-state and interstate, supervision and examination, prudential limits-safety-soundness and consumer protection’s enforcements of Insured Federal Savings Associations and it regulates Insured State Savings Association by all of the above except chartering and licensing regulations. OTS also regulates Savings Association Holding Companies as the same as Insured Federal Savings Associations with the exception of consumer protection’s enforcement.

National Credit Union Administration regulates chartering, licensing, mergers-acquisitions-consolidations both intra-state and interstate, supervision and examination, prudential limits-safety-soundness and the consumer protection’s enforcements of Federal Credit Unions. It also regulates mergers, acquisitions and consolidations of State Credit Unions.

Financial regulation’s complexity

Mishkin states that in order to increase the information available to investors and ensure the financial system’s soundness; the government regulates financial markets and intermediaries. He also adds “Regulations include requiring disclosure of information to the public, restrictions on who can set up a financial intermediary, restrictions on what assets financial intermediaries can hold, the provision of deposit insurance, reserve requirements, and the setting of maximum interest rates that can be paid on checking accounts and savings deposits.” (2012, p. 9). All these interrelated regulations and decentralized power seeking and the most significantly federalism make the financial regulation so complex.

Mishkin, F. S. (2012). The Economics of Money, Banking, and Financial Markets (10^th ed.). New York: Pearson.