The State Treasury is busy – AAF

The second week of July saw no drastic changes in the overall pace of regulatory activity, but there was a significant change in regulations by Treasury Department. There were 11 rules with some type of quantitative economic impact, but the proposed rules on digital asset reporting requirements stand out. Across all rules, agencies posted $1.9 billion in total costs and added 8.2 million hours of annual paperwork burden.

KEY REGULATORY INFORMATION

• Suggested rules: 26
• Final Rules: 37
• 2024 Number of pages: 57,268
• Costs of 2024 final regulation: $1.24 trillion
• Cost of proposed rule for 2024: $43.8 billion

IMPORTANT REGULATORY ACTIONS

The most important regulatory action of the week was the Treasury Department’s decisionRule“reporting information and determining the amount realized and the basis for certain digital asset sale and exchange transactions.” Tregulation – titled Gross revenue and basis reporting by brokers and determining the realized amount and basis for digital asset transactions – involves brokers and dealers in digital assets and involves an annual cost of about $519 million, total costs of $1.6 billion, and 7.9 million hours of paperwork. As digital assets become an increasingly visible feature of financial markets, the Treasury can be expected to do the same in the future.

Other financial services rulethat of the Federal Deposit Insurance Corporation (FDIC), concerns “living wills” of financial institutions. It requires:

the filing of restructuring plans by insured depository institutions (IDIs) with assets of $100 billion or more and information documents by IDIs with assets of $50 billion or more but less than $100 billion. The final rule modifies the current requirements regarding the content and timing of full restructuring applications, as well as interim supplements to those applications submitted to the FDIC, in order to support the FDIC’s preparedness to conduct restructurings in the event of significant distress and failure of these large IDIs.

The updated reporting requirements result in an annual cost of $46 million, a total cost of $276 million, and require 300,000 hours of documentation.

There was also a set of five airworthiness directives from the Federal Aviation Administration at a total cost of $7.8 million: CFE Company Engines, Airbus SAS Airplanes, The Boeing Company Airplanes, Dassault Aviation Airplanes, Pratt & Whitney Engines, and General Electric Company Engines. These are standard safety certificates for aircraft and components.

ADMINISTRATION TRACKING

The Biden administration has provided plenty of contrast to the Trump administration on the regulatory front. But perhaps the biggest surprise is that it has gone far beyond restoring the Obama-era regulatory regime and charting its own course. Using AAF RegRodeo data, we provide an update on key trends in President Biden’s regulatory record compared to his last two predecessors. The table below shows the cumulative totals of final regulations with a quantitative economic impact from each administration to this point, at their respective dates.

The main action last week was proposed regulations, so there was less than $2 million change in the Biden administration’s final rule numbers so far. There was essentially no movement in the Obama-era numbers for the other two administrations, but the Trump administration saw a modest $50 million in new costs.

TOTAL LOADS

Since January 1, the federal government has released data on total net costs of $1.29 trillion (including $1.24 trillion in new costs resulting from the final rule) and 64.7 million hours of net bureaucratic burden increase per year (including 21.9 million hours resulting from the final rule).