Memorandum Directs Independent Agencies to Submit New Regulations for Review Prior to Release
NWCUA’s Vice President of Regulatory Advocacy, John Trull, shares insights on the directive and encourages next steps.
A memorandum issued by the Executive Office of the President sets the expectation that all agencies, including independent agencies, such as the National Credit Union Administration and the Consumer Financial Protection Bureau, submit new regulations and guidance for review before they can be released, effective May 11.
Additionally, the memorandum outlines that independent agencies are subject to the Congressional Review Act and the Administrative Procedures Act. If the Office of Management and Budget deems that a rule or guidance is “major,” agencies will be required to submit them to Congress, which could choose to stop them under the Congressional Review Act. Congressional review is generally reserved for rules with an annual economic impact of $100 million or more.
“The NCUA and CFPB have both voluntarily submitted their regulatory agendas to the OMB’s Office of Information and Regulatory Affairs for review for years,” said John Trull, Vice President of Regulatory Advocacy for the Northwest Credit Union Association. “This is a best practice that increases transparency and gives the public and regulated entities insight into what rule changes agencies might pursue over the next six months. Regulatory changes that are enforceable by law should be considered in the open.”
The memorandum lays out the legal justification for regulatory review of independent agencies and reaffirms the process for rulemaking.
“We encourage the Executive Office of the President to go further and set the expectation that all agencies follow the Small Business Regulatory Enforcement and Fairness Act,” said Trull. “The CFPB follows SBREFA, ensuring that Main Street businesses have a voice in the rulemaking through a formal panel process. In addition, agencies are expected to issue compliance guides to assist small entities as well as provide informal guidance.”