Some Comments On Commenting

In the compliance world, this is the busiest time of the year. This is always the time of year when we face learning about compliance provisions in new legislation. It's also a time when we can count on plenty of mail from our regulators landing on our desks. Why is this season so busy? Actually, there are reasons.

Congress tends to pass legislation late in the calendar year -before they recess for Christmas. Most new legislation is introduced early in each Congressional session - in January or February. It is late fall or winter before the bills get hammered into shape, hearings held, compromises made, and legislation actually passed and signed into law.

Regulatory proposals come out in winter for reasons related to the timing of legislation. Many laws contain deadlines for regulatory action that are 180 days or one year from the date of passage. The Federal Reserve staff follows a schedule designed to get final commentary updates published by April 1 of each year (a deadline set in the Truth in Lending Act in order to have changes take effect by October 1 of the same year.)

And the result of all this is that we get deluged with proposals for comment just as we dig into our New Year's resolutions and new banking year.

It is easy to disregard the importance on commenting on the proposals. In fact, I have heard many bankers say that they choose not to "waste time" reading proposals; they'll just read the final. This choice doesn't result in any time savings. Far from it - it actually may contribute to regulatory burden. How? By failing to give regulators information they need about how the proposal would work. There are sound reasons for having a comment period for new regulations. One reason, of course, is that it is required by law. The Administrative Procedures Act is a law with which the federal agencies must comply. That includes going out for comment.

The more important reason for comment periods is that commenting is the method available to you for giving information directly to the regulator to help make the final result work better.

Without your information, the regulation drafter has to operate on what facts and knowledge are already available to them. Usually the proposal is based on this. If you don't like the proposal and don't comment, the final version is not likely to be any better.

What really makes a difference to a regulation are the real situations that banks face, facts about how they operate or how a specific task is accomplished. It can also be helpful to tell regulators what you learn from your customers, particularly when you have customer satisfaction information that you'd like the regulators to take into account. This is all information that the regulators need to get from you. They won't get it from anyone else!

Commenting on proposed regulations is very much like going to the polls to vote. If you don't do it, you forfeit your right to complain later. If you do comment, you may make a very important difference in the final regulation - a difference that makes compliance possible and regulatory burden a little less burdensome than it might have been.

Copyright © 1996 Compliance Action. Originally appeared in Compliance Action, Vol. 1, No. 3, 1/96