Toomey Praises Guidance Document Clarification from Financial Regulators
Washington, D.C. - U.S. Senator Pat Toomey (R-Pa.) issued the following comment regarding the joint statement from five financial regulators clarifying that guidance documents do not have the force or effect of law:
"I welcome the announcement by financial regulators, including the Fed, FDIC, and BCFP, clarifying that guidance documents do not carry the weight of law. It is Congress, not the bureaucracy, that is empowered and elected by the American people to enact legislation. The announcement reaffirms this important constitutional principle."
You may view the joint statement here and Politico's coverage is below.
In 2017, Senator Toomey asked the Government Accountability Office (GAO) to determine whether guidance documents issued by multiple agencies on leveraged lending and the BCFP on indirect auto lending constituted formal rules. When GAO decided that these particular guidance documents were rules, both became subject the Congressional Review Act (CRA). On May 21, President Trump signed into law a CRA authored by Senators Toomey and Jerry Moran (R-Kan.) repealing the BCFP's indirect auto lending guidance.
5 financial agencies say guidance does not have force of law
September 11, 2018
Five financial regulators in a statement today clarified that supervisory guidance does not have the effect of law and said they will try to avoid "bright line" requirements in communicating their expectations through such documents.
The Federal Reserve, CFPB, FDIC, National Credit Union Administration and the Office of the Comptroller of the Currency said guidance documents would not be cited for violations of law in enforcement actions.
"In some situations, examiners may reference (including in writing) supervisory guidance to provide examples of safe and sound conduct, appropriate consumer protection and risk management practices, and other actions for addressing compliance with laws or regulations," the agencies said in the statement.
They still might occasionally seek formal input on guidance documents, but this "does not mean that the guidance is intended to be a regulation or have the force and effect of law."
The regulators also said they would try not to issue multiple documents on the same topic.
The statement comes after Sen. Pat Toomey (R-Pa.) last year sought to prove that two different guidance documents technically qualified as a rule in their implementation, a claim backed up by the GAO.
That saga ultimately led Congress to overturn guidance from the CFPB outlining steps that lenders should take to address discrimination by auto dealers.
Since then, officials at agencies like the Fed and OCC have said publicly that guidance is not binding. But lawmakers, including Rep. Blaine Luetkemeyer (R-Mo.), had called for them to affirm this in writing.