GOP maneuver could roll back decades of regulation

- April 17, 2018

Republicans are preparing to open a new front in their push to roll back regulations across the government, using a maneuver that could enable them to strike down decisions by federal agencies that reach back decades.

As soon as Tuesday, GOP senators are expected to use the Congressional Review Act to topple safeguards issued by the CFPB in 2013 that were intended to discourage discrimination in auto lending.

While Republicans in the Trump era have already taken advantage of the 1996 law to remove more than a dozen recently issued rules, this would be the first time that Congress will have used it to kill a regulatory policy that is several years old.

Now, actions going back to President Bill Clinton’s administration could be in play under the procedure GOP lawmakers are undertaking, forcing numerous agencies to reconsider how they roll out new regulations.

“It’s a hugely important precedent,” Sen. Pat Toomey (R-Pa.), the architect of the effort, said in an interview. “It’s potentially a big, big opening.”

While conservatives are applauding the effort as a way to rein in rogue bureaucrats and boost the economy, consumer advocates are warning that the consequences could be dire.

“This takes an already incredibly dangerous law and cranks it up to 11,” said James Goodwin, senior policy analyst at the Center for Progressive Reform.

Republicans are leveraging two key provisions of the Congressional Review Act.

They’re again taking advantage of fast-track authority that allows a simple majority of the Senate to pass a resolution rolling back a rule if the vote occurs within a window that’s open for no more than a few months. The provision enables senators to avoid a filibuster.

But the more novel use lies in the law’s requirement that federal agencies submit rules to Congress for their potential disapproval. Republicans have landed on a way to target a wide array of decisions — including regulatory guidance — that haven't typically been implemented as formal rules under the Administrative Procedure Act.

"You have this unimaginably large universe of stuff that is now eligible for repeal under the CRA," Goodwin said, citing a hypothetical Occupational Safety and Health Administration workplace safety poster as a potential example. "Agencies don't submit all this stuff because it would be an administrative nightmare."

In the case of the auto-lending policy, the CFPB released it as a guidance document rather than a formal rule governed by the notice-and-comment requirements of the APA. As such, it wasn’t technically submitted to lawmakers for the purposes of the Congressional Review Act. That means the clock for congressional review never started.

That changed last year. For advocates of deregulation, the stars had aligned thanks to the ascendance of a Republican president, Donald Trump, eager to roll back rules and the Republicans retaining control of Congress.

Toomey, the former president of the conservative Club for Growth, went on the hunt for ways the GOP could take advantage of its congressional majority to eliminate federal rules.

He found a way to wield the power that the Congressional Review Act gives a majority of the Senate to sidestep obstruction via filibuster when it comes to years-old regulatory actions.

To do so, he asked the Government Accountability Office to determine whether the CFPB auto-lending guidance qualified as a rule for the purposes of the Congressional Review Act. In December, GAO told him that it did in fact satisfy the legal definition of a rule, starting the clock for Republicans to undo it without having to seek any help from Democrats.

“When regulators regulate by guidance rather than through the process they’re supposed to use, which is the Administrative Procedure Act and do a proper rulemaking, they shouldn’t be able to get away with that,” Toomey said. “If we can get a determination that the guidance rises to the significance of being a rule, then from that moment the clock starts on the CRA opportunity.”

Amit Narang, regulatory policy advocate at Public Citizen, said it “is really going to open up a Pandora’s box.” Public Citizen and 60 other advocacy groups covering the gamut of finance, the environment, labor and gay rights are calling on Congress to oppose the CFPB rollback, saying it would set a dangerous precedent.

They warned it would put at risk not only protections for workers, consumers, minorities and the environment, but also regulatory certainty for businesses.

"Expanding the power of the CRA to overturn guidance from decades ago will threaten protections hardworking families rely on, making it harder for middle class Americans to get ahead and responsible businesses to follow the law," Sen. Sherrod Brown (D-Ohio) said.

Critics have also questioned the need to undo the CFPB auto-lending guidance because the bureau is now led by a Trump appointee, acting Director Mick Mulvaney, who could eliminate it himself. Mulvaney told lawmakers last week he was reviewing the policy. The National Automobile Dealers Association and the American Financial Services Association are supporting the rollback of the anti-discrimination measure, arguing that the way the CFPB crafted the guidance was flawed.

Other lawmakers have begun to test the waters. In November, GAO in a response to a request from Sen. Lisa Murkowski (R-Alaska) confirmed that a 2016 plan from the Bureau of Land Management was a rule for the purposes of review under the CRA. A spokeswoman for Murkowski did not respond to a request for comment.

Paul Larkin, a senior legal research fellow at the Heritage Foundation, has been advocating for Congress to take advantage of this deregulatory pathway in the Congressional Review Act, saying it could force agencies to comply with formal rulemaking requirements and help the economy by cutting red tape.

"This would indicate that Congress believes it can reach back beyond what the conventional wisdom was," he said.


 

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