President Trump yesterday issued an executive order formalizing the administration’s position that guidance documents issued by federal regulatory agencies are not legally binding, and that any legally binding requirements must be issued through regulation. Once the order is implemented via a memo from the Office of Management and Budget, each agency must issue a regulation setting forth its processes for issuing guidance documents within 300 days.
The order directs each agency to publish within 120 days of the OMB memo a searchable list of its guidance documents and rescind those that should no longer be in effect. It also directs agencies to provide notice andcomment periods before issuing new “significant guidance” documents, which it defines as those that would lead to an annual effect on the economy of $100 million or more. The order does not apply to independent regulatory agencies, which include the CFTC, the FDIC, the Federal Reserve and the SEC.
The administration also issued a second executive order aimed at promoting transparency and fairness in civil administrative enforcement and adjudication. Under that order, when an agency takes an administrative enforcement action, it “may apply only standards of conduct that have been publicly stated in a manner that would not cause unfair surprise.” The order also states that agencies must provide individuals the opportunity to dispute an administrative enforcement action, and that the agency must respond to the individual’s objection in writing.
