What is a regulation and how is it made?
A regulation is a set of requirements issued by a federal government agency to implement laws passed by Congress. For example, the Federal Reserve Board over the years has issued regulations to help implement laws such as the Federal Reserve Act, the Bank Holding Company Act, and the Dodd-Frank Act.
When the Board issues a regulation, it follows the same basic process required of all federal agencies. In general, a federal agency first proposes a regulation and invites public comments on it. The agency then considers the public comments and issues a final regulation, which may include revisions that respond to the comments.
The process is designed to make the agency's views transparent and give the public and interested parties a chance to submit their views on a proposed regulation before it is finalized. Public input is critical to the rulemaking process because it provides important information about the potential impact of a proposed regulation.
The Board supervises a variety of financial firms and, through its regulations, seeks to promote an efficient, safe, and sound financial system that supports the growth and stability of the U.S. economy.