The answer is no one knows just quite yet. In the wake of the new administration’s ongoing reshaping of the administrative state through executive presidential power. The dust is still in the air with more to come from the relentless executive orders on regulatory agencies responsible for funding and oversight. Where’s the fun in not speculating though (if it’s not reckless)? If there is one trend that will likely be the mold into which the dust settles, it would be bet on big business friendly policies.
Presidential Authority Supersized
On February 18, the President issued an executive order entitled “Ensuring Accountability for All Agencies” requiring all federal departments, agencies, and independent agencies under the executive branch to submit all proposed and final regulatory actions to the Office of Information and Regulatory Affairs (OIRA) before publication in the Federal Register.
Section 2(b) of this order gives oversight of all executive branch agencies and independent agencies to the director of the Office of Management and Budget (OMB). The ultimate authority for the OMB and all the named agencies and departments is addressed under Section 7 of the executive order. That provision states that the President and Attorney General, shall make all interpretations of law to the executive branch in keeping with the President’s policies and priorities.
This order will likely impact operations of the National Credit Union Administration (NCUA) and the Consumer Financial Protection Bureau (CFPB) - which has already been halted in its operations, enforcement, and rulemaking by the acting director. Additionally, this executive order also expressly places the Federal Elections Commission under the oversight of the President under section 3(b).
This order along with currently published executive orders are likely to be challenged in the courts exceeding constitutional powers of the presidency as Congress is charged with oversight and budgetary control over the same agencies and departments included in the executive order.
CFPB Operations Halted
On February 3, the newly appointed acting director of the Consumer Financial Protection Bureau (CFPB) announced the immediate cease of the Bureau’s regulatory operations and activities. Acting director Bessent shall serve until the administration’s nominee is confirmed by the U.S. Senate. In an email to CFPB staff, the following was announced effective immediately:
No further actions will be taken on approving or issuing further rules or guidance.
Suspension of effective dates of all issued and published final rules not yet effective.
No further settling or initiating further investigative activities in enforcement actions.
No issuing of any types of public communications or research papers.
No approving or executing material agreements including employee or contractor matters.
No approving filings or appearing in litigation other than to stay pending matters.
The order makes the following pending rules suspended indefinitely:
Two significant final rules that were set to be effective later this year, the Overdraft Rule for Very Large Financial Institutions (October 1) and the Medical Debt Reporting Rule are now suspended indefinitely. For more information, please contact Dan Le, General Counsel.
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