U.S. Reps. Alex X. Mooney (R-WV) and Blaine Luetkemeyer (R-MO) introduced Wednesday legislation requiring financial regulators to provide an annual review that ensures that non-binding guidance does not have an economic impact.
Specifically, the Financial Guidance Review Act requires financial regulators to execute a yearly review of guidance from the previous calendar year as a means of determining if any guidance may cause economic effects over $100 million.
“No guidance should have substantial economic effects, and guidance should not be used as an end-around the normal rulemaking process,” Mooney said. “This bill strengthens congressional oversight of regulators to ensure that guidance is used to clarify regulation, not further increase regulatory burdens.”
Under the legislation, the review must be completed during the first six months of a calendar year, and regulators would be required to submit a report to Congress with the results of their review. It also revokes any guidance with potential economic effects of $100 million or more and requires regulators to publish any guidance revoked on their website.
“Under no circumstances should guidance have a $100 million impact on the American economy,” Luetkemeyer said. “Regulatory guidance is neither a law nor rule. It is merely a suggestion and should therefore be treated that way. This legislation ensures the financial regulators consistently review guidance, and it protects the American economy from burdensome, costly, and non-binding guidance documents.”
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