Luetkemeyer Statement on Regulators’ Guidance Announcement
Washington, October 21, 2020
Tags: Financial Services
WASHINGTON, D.C. – Today, Congressman Blaine Luetkemeyer (MO-03) released the following statement on prudential regulators’ Notice of Proposed Rulemaking to codify the Interagency Statement Clarifying the Role of Supervisory Guidance issued by the agencies on September 11, 2018.
“Prudential regulators are taking an important step toward ending the abuses and misuses of guidance that were rampant during the Obama Administration. For too long, regulators sidestepped Congress and used guidance as a tool to inappropriately force private industry to behave in a way that appeased the ideals of bureaucrats.
“The Trump Administration has largely put an end to that practice, and I applaud their effort to formalize the end with this rule. I urge my Congressional colleagues to follow suit and pass a law to prevent future administrations from carrying out these abuses ever again.”
Background: Guidance documents are intended to clarify an agency’s policy or interpretation of a regulation but do not carry the weight of finalized rule or law. The official rulemaking process includes numerous steps that must be taken before final enactment. These steps can include public notice and comment, submission to Congress pursuant to the Congressional Review Act, and additional provisions to ensure the input of all stakeholders is included in the formation of a rule. Guidance documents skip over many of these checks and balances and can be published without review or comment.
In December 2018, Congressman Luetkemeyer introduced the Guidance Clarity Act to require all federal agencies to include a guidance clarity statement that states the guidance is not issued in accordance with the rule-making process and therefore is not legally binding.
Full Guidance Clarity Act text can be found here.
FDIC’s Notice of Proposed Rulemaking can be found here.