Today, the Federal Reserve, Bureau of Consumer Financial Protection, Federal Deposit Insurance Corporation, National Credit Union Administration and Office of the Comptroller of the Currency announced an important distinction between guidance and rule. In June, Chairman of the Subcommittee on Financial Institutions and Consumer Credit, Congressman Blaine Luetkemeyer (MO-03), called on financial regulators to address so-called “regulation by enforcement.” Chairman Luetkemeyer released the following statement applauding today’s announcement:

“I’m very pleased that the federal financial agencies have finally taken the first step in drawing the important distinction between rule and guidance, something I’ve pressed them to do for some time.  For too long, regulators have inappropriately used guidance as if it had the full force of a formal rulemaking.  We must continue to restore sanity and clarity in the regulatory regime, and move away from regulation by enforcement,” said Chairman Luetkemeyer. “In that spirit, I plan to introduce legislation to mandate that all guidance issued by federal regulatory agencies feature a disclosure stating the guidance has not gone through the formal rulemaking process and does not have the effect of law.”

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