WASHINGTON–The credit union trade groups believe a new Trump Administration memo requiring independent federal agencies such as NCUA to submit any rules or guidance for review ahead of approval of Congress could be a good thing, although there are concerns over the potential effect on the agency’s ongoing independence.
NCUA, noting it is still reviewing the memo, declined to comment.
As CUToday.info reported here, the effort is part of a broader effort by the White House to take more control over the federal government, including independent agencies such as the CFPB, SEC, Federal Election Committee and even the Federal Reserve (with exemptions around its rate-setting powers) that have typically operated without strong oversight.
What Memo States
The new rules were announced by the Office of Management and Budget in a memo with the subject line “Guidance on Compliance with the Congressional Review Act.” According to the memo, effective May 11, agencies must submit all proposed rules and regulatory guidance to the Office of Information and Regulatory Affairs (OIRA), which will then determine whether a proposed rule is “major” or “minor” according to standards laid out in the Congressional Review Act.
If the proposed rule is major, it can’t go into effect until Congress has 60 legislative days to vote on whether or not to allow the rule, the OMB memo says. Should Congress vote against the proposed rule, the agency involved is prohibited from devising a replacement rule ever, unless a new law enacted by Congress after the rule was rejected directs the agency to do so, the memo states.
Trade Group Response
NAFCU’s VP-Legislative Affairs Brad Thaler, who noted NCUA already works with the Office of Management and Budget with much of its rulemaking, said the new White House announcement is a reaction to an inability to get additional regulatory relief through Congress, and that the regulatory burden on credit unions continues to increase.
“From our perspective, we want to reduce the regulatory burden, but at the same time we do not want NCUA to lose its independence,” said Thaler. “If this is done in the right way, it can be a way to get regulatory relief or at least keep regulations in check.”
Mitria Wilson, senior director of advocacy and counsel with CUNA, said the trade group is paying particular attention to the issue of guidance from agencies such as NCUA and the CFPB.
“In the past the independent agencies have used guidance to put out their positions on more controversial areas, such as Operation Choke Point, payday lending, and disparate impact in auto lending,” said Wilson. “These in the past are not subject to review.”
Under the White House memo, Wilson said such guidance that in the past has had no regulatory oversight will now have such oversight, which she said CUNA welcomes.
The White House memo requiring new regulations and rules be subjected to the Congressional Review Act is expected to be challenged by Democrats in Congress, with legal challenges also expected.