By Michelle Flores / Updated: Jul 17, 2019

Lending Regulators and Authorities in a Nutshell

Lending Regulators and AuthoritiesThe federal and national governments have many agencies which oversee and regulate the financial companies and markets in the state. Each agency is responsible for specific tasks which allow them to work independently. These agencies seek to protect and regulate all participants by addressing privacy disclosure, anti-money laundering, and fraud prevention.

Although their opinions vary depending on their effectiveness and efficiency, they all have a specific goal which works for the favor of the public. With that in mind, this article will give a complete view of the regulatory bodies, as well as the responsibilities of each one of them.

The Federal Reserve Board

It is the highest and the most recognized body among the other regulatory authorities. For that reason, it is often held responsible when the state faces tough economic crisis or downfalls.

The agency is responsible for influencing liquidity, money and all credit operations. The Federal Reserve Board holds the significant tools for implementing and developing the monetary policy together with the market operations which control the sale and the purchase of the U.S Treasury securities.

Office Of The Currency Controller

It is one of the oldest agencies which were created way back in 1863 by the national currency board. The primary purpose of this body is to regulate, supervise and even provide charters to all U.S banks. The Office of The Currency Controller ensures that the banks operate in an ethical and professional manner. The supervision also ensures that the banks adhere to the financial and banking rules.

Financial Industry Regulatory Authority (FINRA)

This regulatory body, established in 2007, is considered to be a self-regulatory authority. Its primary role is to oversee all institutions in the securities industry and to ensure that they operate by the law. Additionally, The Financial Industry Regulatory Authority trains the financial services professionals, tests the agencies and issues licenses to them. It also oversees the arbitration and mediation processes for disputes that arise between the brokers and their customers.

The Federal Deposit Insurance Corporation (FDIC)

This regulatory body was formed by the Glass Steagall Act of 1933. Its primary role is to ensure that the insurances deposits guarantee safety checking as well as the savings deposits to the bank. It offers protection of up to $250,000 per person.
The Federal Deposit Insurance Corporation insures deposits for more than 7,000 banking institutions. It is also the role of the FDIC it ensures that financial institutions operate within the right men to protect their customers. It also manages the failed banking institutions (banks in receivership).

Ever since the body operates, there has not been any case of customers who have lost any of their insured funds. There has been no case of a bank failure which put the customers’ deposits into the risk of getting lost.

State Bank Regulators

These regulators monitor all state-chartered banks to ensure that all operations are done by the law and that the rights of the customers are not issued. The banking regulation is highly fragmented in the United States as compared to the other countries, which have one or two banking regulators. The banking industry is also regulated by both the state and federal levels, to ensure that fraud cases are minimized.


1 U.S. Securities and Exchange Commission “Banking Regulators” https://www.sec.gov/fast-answers/answersbankreghtm.html

2 Practial Law Thomson Teuters “Banking Regulation in the US: Overview” https://uk.practicallaw.thomsonreuters.com/w-007-7945?transitionType=Default&contextData=(sc.Default)&firstPage=true&comp=pluk&bhcp=1

3 Council of Foreign Relations “The U.S. Financial Regulatory System” https://www.cfr.org/backgrounder/us-financial-regulatory-system

4 Consumer Financial Protection Bureau “A summary Of Your Rights Under the Fair Credit Reporting Act” https://www.consumer.ftc.gov/articles/pdf-0096-fair-credit-reporting-act.pdf

5 the balance “Consumer Credit Laws You Should Be Familiar With” https://www.thebalance.com/consumer-credit-laws-you-should-be-familiar-with-4068374

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