A memo released by the Trump administration’s Office of Management and Budget (OMB) directed all agencies to submit so-called guidance to the White House for review looks like an attempt to put up another major hurdle to sensible and essential regulations meant to protect the health, safety and security of Americans, including their financial and economic security.
The memo instructs even independent regulatory agencies, including the Federal Reserve, the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC), to submit to the White House any new guidance documents so that they can determine whether or not to submit them to Congress to reject under the Congressional Review Act (CRA).
Guidance, as opposed to formal rules, has been used by agencies to provide informal direction on how they should interpret or apply their legal obligations, as well as how an agency’s thinking is evolving on a particular issue. While such guidance is typically issued in response to industry inquiries, Wall Street’s biggest banks have complained that guidance they don’t like is enforced like rules and, therefore, should be subject to the CRA. This is really just another way that the Trump administration is siding with industry to overturn agency actions that they don’t like.