A freeze on new regulation that could affect a number of pending rules recently issued by federal financial institution regulators was signed by President Donald Trump Friday evening.
The freeze requires that new rules that have been sent to the Federal Register but not yet published be immediately withdrawn. Rules that have been published but have not yet taken effect are postponed for 60 days.
For example, a new rule on membership qualifications from the NCUA for credit unions, scheduled to take effect Feb. 7, could be affected by the freeze.
In a memo to executive departments and agencies, Trump Chief of Staff Reince Priebus stated the purpose of the freeze is to to ensure that “the President’s appointees or designees have the opportunity to review any new or pending regulations.”
Additionally, Priebus’ memo noted that Trump has ordered that federal agencies “send no regulation to the Office of the Federal Register (the “OFR”) until a department or agency head appointed or designated by the President after noon on January 20, 2017, reviews and approves the regulation.”
The department or agency head may delegate this power of review and approval to any other person so appointed or designated by the President, consistent with applicable law, the Priebus memo added.
The memo notes that the order is subject to any exceptions the “Director or Acting Director of the Office of Management and Budget (the “OMB Director”) allows for emergency situations or other
urgent circumstances relating to health, safety, financial, or national security matters, or otherwise …”
However, the memo includes no specific language indicating that financial regulatory agencies are not required to abide by the order. A Brookings Institution article published last week focusing on a federal hiring freeze (not a regulatory freeze) noted that, in the past, such executive actions related to hiring freezes included some language excluding financial regulators.
Since Jan. 1, new or proposed rules have been submitted to the Register by the FDIC, OCC and Federal Reserve, in addition to the credit union regulator.
In 2009, on the day of President Barack Obama’s inauguration, Chief of Staff Rahm Emanuel issued a similar memo calling for review of recently issued Bush administration rules.