Regulations and the Impact on Compliance for Businesses

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Recommended: Legislation, that impact on the ICT service

Part of managing Information Risk for the enterprise is ensuring compliance with laws, regulations and following best practices and standards outlined by recognized professional organizations (Whitman & Mattord, 2011). This is a huge task for large enterprises, particularly for those businesses in industries that are highly regulated like insurance and financial services, energy, banking and pharmaceutical.

Managing compliance to federal regulations is getting increasingly difficult. Since 1949, the number of pages of federal regulations has grown from 19,335 pages to 134,261 pages in 2005 (Perry, 2013). This is only federal regulations, and obviously does not include the staggering number of regulations that were added in the wake of the 2008 financial crises which largely impact insurance and financial services, banking and energy. Studies estimate that the cost of compliance by businesses and the enforcement by the federal government has lowered GDP by 2% per year since 1949, and substantially decreased the median household income for Americans because of the economic burden placed on businesses (Perry, 2013).

One example of relatively new, burdensome regulation is the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law in 2010. The law was written in response to the world-wide financial crises of 2008 and the subsequent tax-payer bail out of banks that were considered “too big to fail”. It adds 2,319 pages to our growing federal regulation pile (Berson, 2010). The number of pages only covers the legislation itself, not the almost 250 new formal rules required to comply with the regulation. The law gives the Federal Reserve oversight to audit banks, as well as mutual holding companies, to ens...

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...ompanies. Banking & Financial Services Policy Report, 29(11), 11-17.

Managing risk and compliance. (2010). KM World, 19(3), 6.

Perry, M. (2013, June 26). Federal regulations have lowered real GDP growth by 2% per year since 1949 and made America 72% poorer. American Enterprise Institute. Retrieved from http://www.aei-ideas.org/2013/06/federal-regulations-have-lowered-gdp-growth-by-2-per-year/

Smith, M. (2011, July 1). Managing compliance; Beyond compliance committed to going beyond ‘just good enough’. New Technology Magazine.

Wade, J. (2011, July-August). Dodd-Frank one year later. Risk Management, 58(6), 14. Retrieved from http://0-bi.galegroup.com.olinkserver.franklin.edu/essentials/article/GALE|A264480812/977c6dbdb2ad39275000f9ec288e2d4b?u=colu29131

Whitman, M. E. & Mattord, H. J. (2011). Principles of information security. Boston, MA: Cengage Learning.

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