Last week, seemingly in response to complaints from financial institutions about the agencies' increasing use of guidance and other non-rulemaking-processed statements to effectively, inappropriately "regulate by enforcement," House Financial Services Subcommittee Chair Blaine Luetkemeyer [R-MO] sent these letters to the Federal Reserve Board and the SEC and four other agencies requesting they undertake a series of enumerated "remedial" actions.
Specifically, the letters call on the agencies to promptly:
- Issue and publish a clear statement affirming that guidance documents and other agency statements that haven't been subject to notice & comment rulemaking don't establish binding legal standards, and thus won't be the basis of enforcement actions or supervisory directives.
- Clarify that any failure to adhere to guidance won't - directly or indirectly - form the basis of any other adverse supervisory determinations, such as ratings downgrades.
- Establish a standard practice by which similar clarifying language addressing each of these points is included in any subsequently-issued guidance.
- Take actions to ensure examiners are appropriately educated about the use and role of guidance, and are held accountable when guidance is applied inappropriately.
The letters also note that "almost none" of the significant number of agency statements that have been issued over the years have been withdrawn or rescinded, subject to notice & comment rulemaking, or submitted to Congress pursuant to the Congressional Review Act.
|
See also this Ballard Spahr post.
|