Biden administration imposes moratorium on regulations

The new Biden administration instituted a “regulatory freeze” order on Wednesday, requiring that no new rules be proposed or issued until a Biden-appointed official has reviewed or approved the rule.

The order also requires that all new rules or proposals sent to the Federal Register but not yet published be immediately withdrawn and that agencies “consider” postponing for 60 days the effective dates of those rules, and also consider reissuing the rules for 30-day comment periods.

The Trump administration issued a similar freeze four years ago.

Although such freezes do not generally apply to independent agencies, such as the Federal Deposit Insurance Corp. (FDIC) or the National Credit Union Administration (NCUA), those agencies voluntarily four years ago agreed to go along with it (or, as the NCUA put it in 2017, “adhere to its spirit”).

Legal analysis from four years ago noted that such freezes are routine and only apply to executive departments and agencies – and not independent agencies (which make up most of the financial regulators).

However, the Office of the Comptroller of the Currency (OCC), as an arm of the Treasury Department, is not an independent agency. The regulatory moratorium, as a result, likely affects the April 1 effective date of the so-called “fair access rule,” which codifies that banks should conduct risk assessments of individual customers before denying them credit (rather than denying credit based on types of businesses they are in).

Under the rule – which applies to banks with more than $100 billion in assets – covered banks must make the products and services they choose to offer available to all customers in the communities they serve, based on consideration of quantitative, impartial, risk-based standards established by the bank, according to the OCC. A covered bank’s decision to deny services, the agency said, based on such objective assessment would not violate the bank’s obligation to provide fair access. However, a covered bank’s decision not to offer a specific kind of financial product or service or not to compete in a geographic market is unaffected.

White House memo: Regulatory Freeze Pending Review