OMB Directs Independent Agencies to Submit Rules for White House Review
Commentary by Steven Lofchie
The Office of Management and Budget ("OMB") provided "initial implementation guidance" for regulatory agencies to comply with President Trump's Executive Order "Ensuring Accountability for All Agencies." (See related coverage.)
In the Memorandum, the OMB made clear that independent agencies, including those such as the SEC and FDIC, are required to (i) submit draft rules to the White House for review, (ii) designate a Regulatory Policy Officer and (iii) begin compliance no later than April 21.
The OMB clarified that all regulatory actions—including proposed and final rules, guidance documents and notices of inquiry—are subject to significance determinations and potential review by the OMB's Office of Information and Regulatory Affairs ("OIRA"). The OMB also required independent agencies to revise internal policies that conflict with the review process and ensure that all draft rules are reviewed for compliance with the Administrative Procedure Act, Executive Orders and OMB guidance.
The OMB reiterated that independent agencies may no longer publish draft rules prior to completion of White House review, and that agencies are expected to amend internal voting procedures to ensure that any vote to adopt a rule follows the OIRA process—not precedes it.
The OMB listed all agencies, including the independent agencies, subject to the EO, noting that only the Federal Reserve and the Federal Open Market Committee are exempt and only with respect to monetary policy. The OMB said that regulatory actions by these bodies remain subject to review.
Commentary
While this seems a large change in procedure, it does not seem unreasonable. As a practical matter, one would think that an agency where the Commission is appointed by the President, and where a majority of the Commissioners are from the party of the President, would act in a manner that is consistent with the goals of the President.
If the agency is not acting in a manner that is consistent with the goals of the President, then it is reasonable to ask whose goals the agency is seeking to implement. After all, the Commissioners are not elected, and their authority does not otherwise derive expressly from the Constitution.
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In a new Executive Order, President Trump asserted presidential oversight over all federal agencies, including independent agencies.