President Trump Orders Agencies to Lighten Regulations Impairing Recovery
Commentary by Steven Lofchie
President Donald J. Trump signed an Executive Order directing federal agencies to rescind, modify, waive or issue exemptions from any rules and regulations that may hinder economic recovery in the midst of the COVID-19 pandemic. The Executive Order stipulates that the federal agencies' actions must adhere to applicable laws, public health and safety protections, and national and homeland security.
The Executive Order instructs federal agencies to:
-
remove, amend or provide exemptions from any rules and regulations that "may inhibit economic recovery";
-
temporarily or permanently remove, amend or exempt persons or entities from such regulatory requirements;
-
use, when appropriate for economic recovery, temporary enforcement discretion or extensions of time as provided for in enforceable agreements regarding such regulatory requirements;
-
submit reports on all "regulatory flexibilities" implemented in response to COVID-19 and assess the impact on improving economic recovery; and
-
help businesses re-open by (i) issuing guidance on compliance with regulations, (ii) recognizing the potential difficulty of compliance due to "complex regulations" and "swiftly changing circumstances," and (iii) committing to "fairness" in administrative enforcement and adjudication.
Federal agencies are ordered to use emergency authorities to implement the directives outlined in the Executive Order. Federal agencies are also advised to utilize non-regulatory actions to boost the economy.
The Director of the Office of Management and Budget, the Assistant to the President for Domestic Policy, and the Assistant to the President for Economic Policy will monitor compliance, issue guidance, and set deadlines for the required reviews and reports.
Commentary
The promulgation of regulation is always on an upward trend. The President's Executive Order offers a moment to consider discarding regulations that are outmoded or an economic drag. To advocate the reversal of the trend is not to suggest caveat emptor. Rather, it is to suggest that perhaps 50,000 rules are unnecessary where 40,000 would suffice. Yesterday's story SEC Provides Relief for Broker-Dealers Acting as Agents for TALF offers a good example. Prohibitions in Section 11(d) of the Exchange Act are now almost 90 years old and are simply no longer necessary, as other regulations, more directly relevant to customer protection, have since been adopted. No doubt there are good number of other rules that have seen their day, as well.
Each federal agency should initiate a meaningful, public and documented process of rule review.