Rep. Blaine Luetkemeyer (R-Mo.) today introduced a bill that would require federal regulatory agencies when issuing guidance documents to clearly state that those documents are not legally binding. “Our government prides itself on a transparent system of checks and balances, yet many agencies have used guidance in lieu of following the established rulemaking process to regulate industries,” Luetkemeyer said. “My bill will address the vast uncertainty surrounding the unique role of guidance in all federal agencies, ensuring small businesses and other regulated entities fully understand the rules they are subject to.”
Luetkemeyer’s bill came after financial regulators earlier this year issued a joint statement clarifying that supervisory guidance in bank supervision “does not have the force and effect of law.” The American Bankers Association has long noted the need for additional clarity around the role of guidance, and submitted a rare joint petition with the Bank Policy Institute calling on each of the bank agencies to codify their statement in a formal rulemaking.