Validating a password format
It seems like you need a Rails validation callback (and a virtual attribute for submitted_password). I'd write:

attr_accessor :submitted_password
validate :password_format_is_valid?

def password_format_is_valid?
  regex = Regexp.new(Setting['global_admin.password_format_regex'])
  unless submitted_password =~ regex
    self.errors.add(:password, Setting['global_admin.password_format_error_message'])
    false
  end
end


Comments:


In the vein of Lisp, the last expression of a body in Ruby is the return value of the method/block, so no need to use an explicit return (in fact it's unidiomatic and discouraged)
Note that Rails can validate fields with regular expression, you should use the predefined validations whenever possible: validates_format_of.