President Trump issued an executive order today aiming to restrain the growth in regulatory costs and volume. The order would require a net incremental budgetary cost of zero or less for most new regulations while also requiring agencies in most cases to identify two regulations to be rescinded for every new one issued.
While the language of the order is not specific about what agencies are covered, news services reported today that a White House spokeswoman said that independent regulatory agencies — including most financial and banking regulators — would be exempt.
Effective immediately, most executive departments and agencies will be required to maintain a total incremental budgetary cost of zero or less for all finalized regulations, unless required by law or approved by the director of the Office of Management and Budget. When proposing a new rule, an agency must identify two existing regulations to be rescinded, and it must offset new regulatory costs by eliminating the same costs from at least two regulations.
Starting with fiscal year 2018, the rule establishes an outline for a “regulatory budget,” with OMB providing each agency a total incremental cost cap on regulations in the upcoming fiscal year; agency heads will be required to avoid exceeding the cap and, in cases where a reduction in total regulatory costs is required, rescind or rewrite rules to meet the lower cap.
The order directs OMB to provide further details on how the order will be implemented and how costs will be accounted for. It also exempts regulations related to foreign affairs, defense or national security, as well as rules related to internal agency affairs or those exempted by the OMB. One major effect of the order would seem to be a significant increase in the power of OMB as manager of the regulatory budget affected agencies must follow. As the order is implemented and further information is made available, the American Bankers Association will monitor its effects on any bank-related regulations. For more information, contact ABA’s Wayne Abernathy.