In this statement, the Committee on Capital Markets Regulation (the “Committee”) reaffirms its long-standing position that the Administrative Procedure Act (the “APA”) fully applies to supervisory and regulatory actions by the U.S. Federal Reserve Board (the “Fed”). In particular, we review a forthcoming  law review article, Bank Supervision and Administrative Law, by former Federal Reserve Governor and current Harvard Law School Professor, Daniel Tarullo, that asserts that the APA does not fully apply to bank supervision and regulation by the Fed.


The statement begins by summarizing the procedural requirements applicable to any U.S. federal agency action set forth in the APA.  It then reviews Professor Tarullo’s analysis of the procedural requirements that apply to Federal Reserve stress testing, highlighting his argument that certain banking statutes on capital regulation may overrule the administrative law requirements that would otherwise apply to stress testing practices. The statement concludes by reviewing case law on administrative law “exceptionalism,” showing that it does not support Professor Tarullo’s claim for exceptionalist treatment of banking supervision and regulation.

The full statement is available here.