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On June 30, President Biden signed into law a joint resolution to repeal the Office of the Comptroller of the Currency’s (OCC) so-called true lender rule.  The rule was repealed under the Congressional Review Act (CRA), which allows Congress to repeal new federal regulations by passing a joint resolution of disapproval that must be later signed by the president.  Federal regulations repealed under the CRA are treated as if they had never gone into effect.
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Continue Reading Congress Repeals the OCC’s True Lender Rule

On October 22, 2019, the U.S. Government Accountability Office (“GAO”) issued two letters concluding that three Federal Reserve Supervision and Regulation letters, SR 12-17: Consolidated Supervision Framework for Large Financial Institutions, SR 14-8: Consolidated Recovery Planning for Certain Large Domestic Bank Holding Companies, and SR 11-7: Guidance on Model Risk Management, are “rules” under the Congressional Review Act (“CRA”) and therefore must be submitted to Congress and the Comptroller General for review before they can take effect.  The GAO letters respond to requests made by several senators for determinations of whether the three SR letters, as well as SR 15-7: Governance Structure of the Large Institution Supervision Coordinating Committee (LISCC) Supervisory Program, are rules under the CRA.  The GAO concluded that SR 15-7 is not a rule under the CRA.
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Continue Reading GAO Concludes Three SR Letters Are Rules Under Congressional Review Act

On April 11, 2019, Acting Director of the Office of Management and Budget (the “OMB”) Russell T. Vought sent a memorandum to executive department and federal regulatory agency heads regarding compliance with the Congressional Review Act (the “CRA”). The memorandum clarifies that the CRA applies to “a wide range of other regulatory actions” beyond notice-and-comment rulemaking, including “guidance documents, general statements of policy, and interpretive rules.” The memorandum also formalizes a process for how the Office of Information and Regulatory Affairs (“OIRA”) will classify regulatory actions for CRA purposes. The memorandum could significantly tighten Congress’ control over regulatory agencies. …
Continue Reading OMB Memorandum Paves the Way for Increased Congressional Oversight of Regulatory Agencies

On September 11, 2018, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Bureau of Consumer Financial Protection (the “Bureau”, and, collectively, the “Agencies”) issued a statement “clarifying the role of supervisory guidance.” The release affirms that the Agencies “do not take enforcement actions based on supervisory guidance” and that such guidance “does not have the force and effect of law.” This statement continues a recent pattern in regulatory policy of downplaying the force of guidance documents, at least as they relate to enforcement actions.

The statement explains that, rather than create binding rules with the force and effect of law, guidance “outlines supervisory expectations or priorities” and/or provides examples of practices the Agencies consider acceptable under applicable legal standards, such as safety and soundness standards. Further, the Agencies state that guidance is often issued in part as a response to requests from supervised institutions to “provide insight to industry” and help “ensure consistency in the supervisory approach.”…

Continue Reading Banking Regulators Issue Joint Policy Statement Downplaying the Role of Supervisory Guidance in Enforcement

On December 5, 2017, the U.S. Government Accountability Office (“GAO”) issued a letter finding that the Consumer Financial Protection Bureau’s March 21, 2013 Bulletin on Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act is a “rule” for the purposes of the Congressional Review Act (“CRA”), and therefore should have been submitted to …

On March 9, 2017, the CFPB released a proposal to delay the effective date for certain provisions of the prepaid accounts final rule for six months, from October 1, 2017, to April 1, 2018.  In its proposal, the CFPB indicated that the proposed extension was prompted by industry concerns about constraints on the ability to pull and replace prepaid card products and related packaging materials with non-compliant disclosures from retail locations before the effective date.  Comments on the proposal to delay the effective date are due 21 days after the proposal is published in the Federal Register.

The CFPB noted that a delayed effective date also would give it the opportunity to evaluate certain substantive aspects of the prepaid accounts final rule that were not anticipated or fully explained during the comment period.  Although the CFPB is not proposing any substantive amendments to the prepaid accounts final rule, the CFPB explained that the delay in the effective date would allow it “to assess whether any additional adjustments to the Rule are appropriate” and issue any proposed revisions it finds necessary and appropriate.  If the CFPB determines that further adjustments are necessary, it will issue a separate proposal.
Continue Reading CFPB Proposes Extension of Effective Date for Prepaid Accounts Final Rule