November 18, 2024 - In the wake of the Republican sweep of the presidency and both house of Congress, two leading Congressional Republicans recently called on the current federal regulatory agencies to cease all rulemaking and for the administration to withdraw all pending appointments.  Last week Rep. French Hill (R. AK), a senior member of the House Financial Services Committee (and candidate for leadership of that committee in the coming Congress) sent a letter to the heads of the Federal Reserve, the Department of the Treasury and six federal financial agencies that govern financial services, calling on them to “immediately cease all ongoing rulemaking actions and suspend the proposal or promulgation of any regulations.”  He argued, in effect, that the voters have spoken and, “as a matter of transparency and public accountability”, each of the agencies “should abandon any action or plan…which voters have already rejected.”  On Sunday, Senator Tim Scott (R. SC), currently the Ranking Member of the Senate Banking Committee (and incoming Chairman for the next Congress), sent a letter to President Biden requesting that the President ensure that federal financial and housing regulators “should suspend any rulemaking and nomination related activities.”  Senator Scott called on the agencies to “cease all rulemaking, including the finalization of any pending or proposed regulations or guidance, and to comply with federal record retention laws and preserve all agency documents, records and communications.”  He also demanded that President Biden withdraw all pending nominations within the Banking Committee’s purview.  Most notably, this would include the nomination of Christy Goldsmith Romero to replace the outgoing current Chair of the FDIC, Martin Gruenberg.

Even before the two letters were sent, we predicted that it would be “pens down” for the regulatory agencies given that any rules they do finalize before the beginning of the next Congress would be voided by a bare majority of the members of the House and Senate under the Congressional Review Act (“CRA”).  Covington’s memo on the CRA is a helpful guide to how that would work.

So, the letters from Rep. Hill and Senator Scott may be seen as an implicit and not-so-friendly reminder to the President and the federal agencies that they will not hesitate to invoke the CRA next year if the agencies decide to move forward with their agendas.