Administration Regulation, Assessment Example

The Regulations Agency was the Federal Housing Enterprise Oversight Office (OFHEO), the proposed regulation is the Reporting of Fraudulent Financial Instruments. The Reporting of Fraudulent Financial Instrument was proposed that would require the Federal National Mortgage Association, the Federal Home Loan Banks, and the Federal Home Loan Mortgage Corporation to report the Federal Housing Finance Agency about any fraudulent financial instruments that they sold or purchased. This regulation was proposed in order to require the entities to maintain and establish procedures, training programs, and internal controls to guarantee any fraudulent instruments are reported and detected. This regulation is interesting because it exacts the wrongs within the banking industry that discriminate and cheat consumers out of money in order to make them richer. This regulation will help for regulating entities and maintaining records or any reported fraudulent behavior. The regulation does not affect the business that I am currently working in, and can be found at: http://www.regulations.gov/#!documentDetail;D=OFHEO-2009-0003-0001

Under the Section 1379E of the Safety and Soundness Act, the regulated entities must report and conduct internal controls, and the Director must submit a timely report of any discovered purchased or sold fraudulent financial instrument or loan, and suspicion of any possible fraud related to the sale or purchase of any financial instrument or loan. The proposed regulation requires that each entity establish procedures and protocols to report any such transactions. The regulation will provide protection from any liability in making a report if it acts in good faith. Congress has pushed to combat mortgage fraud in order to stabilize mortgage markets and protect homeowners and investors.

I recommend this regulation to be passed because it supports the current consumer attitude. Not only is the Congress concerned but the non-reporting of fraudulent behavior is a part of the factors that contributed to the recession that the United States is currently recovering for. This regulation will help to ease the consumer concerns by requiring that these larger entities maintain and control over internal controls and reporting of fraudulent behavior of loans and mortgages. This comment is intended to give a consumer approval of the government stepping up to protect homeowners and investors.

The deadline for the regulation was August 17, 2009.

When comments are made during the proposal of the regulation, any one that wishes to challenge the agency rule on the grounds that it is arbitrary, capricious, or in violation of the law. The comment allow for me to legally express concerns, and submit alternatives.

If the proposal passes (passed) then the five legal theories include; arbitrary, capricious, or abuse of any law that is implied with informal rulemaking, that requires the agency to show evidence that support the proposed rule. The second theory is the regulation is unsupported by the substantial evidence. A test is conducted to review of hybrid and formal rulemaking. The third theory is that a regulation can be placed aside if the agency did not with the APA requirements of publications, notices, and public comments. The forth theory is if the regulation is unconstitutional, where it can be challenged that allow for the search of records and other requirements. The fifth theory is that the court is “ultra vires” or beyond its power, where the regulation goes beyond the authority given to the agency.

The only challenge would probably be the first theory that will force the agency to provide substantial evidence to support the regulation.