WASHINGTON — Rep. Blaine Luetkemeyer is calling on bank regulators to draw up a list of guidance going back 20 years to determine whether it should be submitted to Congress for review.
The Missouri Republican's letter to the agencies last week came on the heels of the Government Accountability Office determination that the regulators' 2013 leveraged lending guidance was a general policy statement and therefore a rule that should have been submitted to Capitol Hill under the Congressional Review Act.
The law allows lawmakers to consider overturning a rule by simple majority if they act within 60 session days of a rule being published. Some have interpreted the GAO’s finding to mean that the guidance is ineffective because it was never submitted for congressional review and that that standard could apply to other existing guidance.
Luetkemeyer suggested there were other agency decisions that were not appropriately reviewed by Congress.
“I note that in recent years, your agencies have also issued many other guidance and supervisory letters that were never submitted to the Congress pursuant to the [Congressional Review Act], and therefore are also not yet effective,” Luetkemeyer said in the letter to the heads of the Federal Reserve Board, Federal Deposit Insurance Corp. and the Office of the Comptroller.
“I urge you to conduct a ... review of that guidance, which is now presumably ineffective and unenforceable,” he added. He asked the agencies to respond by Dec. 5.
The GAO determination, which was in response to a letter from Sen. Pat Toomey, R-Pa., left banks in limbo — uncertain whether the leveraged lending guidance could be ignored or whether the regulators would continue to apply the guidance confidentially in supervisory determinations or exam criticisms.
Luetkemeyer looked to address those concerns in the letter, saying he would like to “confirm that your agency is not issuing Matters Requiring Attention or Matter Requiring Immediate Attention on the basis of a bank’s noncompliance with the guidance and not making any examiner criticism or other supervisory determination based in whole or in part on noncompliance with the guidance.”
The GAO finding could have far-reaching effects. It puts all guidance since the creation of the Congressional Review Act, which was created since 1996, in jeopardy as Congress can use the legislative procedure to nullify policies deemed to be rule.