On Friday President Trump signed an Executive Order establishing regulatory reform task forces within federal agencies. This step follows others in a process to execute on his campaign promise of deregulation.

  • On January 20 – Trump’s first day in office -- Chief of Staff Reince Preibus sent a letter to the heads of executive departments and agencies putting a hold on new regulations
  • On January 30 Trump signed his “2-for-1” Executive Order, stating that for every new regulation proposed, two old ones must be proposed for elimination.
  • On February 2, a White House memorandum was released, titled “Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017, Titled “Reducing Regulation and Controlling Regulatory Costs.”

This latest action goes further to see that these intentions are carried out. It requires every federal agency (except those specifically exempted) designate “Regulatory Reform Officers” (RRO) within 60 days, form a Regulatory Reform Task Force, and report on progress within three months. The RROs will oversee the implementation of regulatory reform initiatives and policies, including:

  • Executive Order 13771 of January 30, 2017 (Reducing Regulation and Controlling Regulatory Costs), regarding offsetting the number and cost of new regulations;
  • Executive Order 12866 of September 30, 1993 (Regulatory Planning and Review), as amended, regarding regulatory planning and review; 
  • section 6 of Executive Order 13563 of January 18, 2011 (Improving Regulation and Regulatory Review), regarding retrospective review; and
  • the termination, consistent with applicable law, of programs and activities that derive from or implement Executive Orders, guidance documents, policy memoranda, rule interpretations, and similar documents, or relevant portions thereof, that have been rescinded. 

The order states that, at a minimum, each Regulatory Reform Task Force shall attempt to identify regulations that:

  • eliminate jobs, or inhibit job creation;
  • are outdated, unnecessary, or ineffective;
  • impose costs that exceed benefits;
  • create a serious inconsistency or otherwise interfere with regulatory reform initiatives and policies;
  • are inconsistent with the requirements of section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note), or the guidance issued pursuant to that provision, in particular those regulations that rely in whole or in part on data, information, or methods that are not publicly available or that are insufficiently transparent to meet the standard for reproducibility; or
  • derive from or implement Executive Orders or other Presidential directives that have been subsequently rescinded or substantially modified.

insideARM Perspective

With the February 2, 2017 “Interim Guidance” memo we learned that the 2-for-1 Order did not apply to independent agencies like the CFPB.  One might make the assumption that this Order also does not apply.

However, in the section on Accountability, this latest Executive Order includes a directive that the Director of the Office of Management and Budget issue guidance within 60 days regarding implementation, possibly also addressing “how agencies not otherwise covered under [subsection 901(b)(1) of title 31 of the United States Code] should be held accountable for compliance.” So he is starting where there is a clear path, but seems to be exploring how to widen the scope.

In separate but related news, speculation continues regarding who might be considered to replace CFPB Director Richard Cordray -- whether Trump fires him, or whether he serves out his full term, which ends in mid-2018. Mentioned for several weeks has been Brian Brooks, who has close ties to Treasury secretary Steven Mnuchin. He is currently executive vice president at Fannie Mae, overseeing fair lending, marketing and communications. Also rumored as being considered for the job are former Rep. Randy Neugebauer (R-Texas), and Todd Zywicki, an economist at the Mercatus Center at George Mason University.

No doubt, other names will emerge on the list. Whoever ends up leading the CFPB will likely change the rulemaking and enforcement direction, at least for the duration of the Trump presidency. No doubt a Trump appointee will share a common interest in deregulation and will be happy to adopt the requirements of these related Executive Orders.

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