United States: A Rule By Any Other Name: What Is A ‘Rule' Subject To Disapproval Under The Congressional Review Act?

In addition to formal regulations, informal federal regulatory guidance has become commonplace in the world of banking law.

The terms "guidance," "bulletin," "interagency statement," "advisory letter," "financial institution letter," "frequently asked questions" and others describe issuances by bank regulatory agencies that are typically not formally promulgated as regulations, but are provided as informal explanations of regulatory policies and expectations. Bank regulatory manuals and handbooks also provide this type of informal guidance.

In 2017 alone, the federal prudential bank regulators — the Office of the Comptroller of the Currency (the "OCC"), the Board of Governors of the Federal Reserve System (the "Fed") and the Federal Deposit Insurance Corporation (the "FDIC") — put out dozens of regulatory guidance issuances for banks.  

However, the federal Government Accountability Office (the "GAO") has recently issued two opinions that could impact this steady flow of informal bank regulatory guidance.

GAO opinions

Each of the two GAO opinions issued in late 2017 determined that a specific issuance of informal financial regulatory guidance (described below in more detail) is a "rule" under the Congressional Review Act (the "CRA"), meaning that the issuance must be submitted to Congress for review and can be disapproved by Congress. 

In both cases, the regulatory issuances were not promulgated as formal regulations under the federal Administrative Procedure Act (the "APA") and were not submitted for review under the CRA. Instead, the issuances were released by the respective agencies in an informal manner. The agencies responsible for the issuances did not consider APA rulemaking procedures or the CRA to be applicable.

The GAO's opinions, stating that the issuances are "rules" under the CRA, were provided in response to a request from Senator Pat Toomey, who serves on the Senate Banking, Housing and Urban Affairs Committee and is the chairman of the Financial Institutions and Consumer Protection Subcommittee. 

Regulatory issuances addressed by GAO opinions

The two regulatory issuances (the "Issuances") that are the focus of the GAO opinions are:

  • The "Interagency Guidance on Leveraged Lending" issued in 2013 by the OCC, the Fed and the FDIC; and
  • A "Bulletin" on Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act issued in 2013 by the Consumer Financial Protection Bureau (the "CFPB").

Basis for GAO opinions

The GAO noted in its opinions that the CRA borrows the definition of "rule" from the APA. The GAO also expressly stated in the opinions that the responsible agency's characterization of guidance as not being a "rule," was not dispositive. In other words, simply calling an Issuance "Interagency Guidance" or a "Bulletin," rather than a "rule," does not determine whether that Issuance is a "rule" under the CRA.

In each case, the GAO determined that the Issuance in question was a "general statement of policy," which qualifies as a "rule" under the CRA. According to the GAO, each responsible agency agreed that its Issuance was, in fact, a "general statement of policy," but contested the characterization of the Issuance as a "rule" under the CRA.

Binding vs. non-binding 

As part of the process of putting together its opinions on the Issuances, the GAO asked each of the responsible agencies to explain why it adopted the applicable Issuance without complying with the CRA. According to the GAO opinions, each agency argued to the GAO that the applicable Issuance should not be considered a "rule" under the CRA because the Issuance was not legally binding. 

However, the GAO determined that any general statement of policy can be a "rule" under the CRA regardless of whether it is legally binding.

The regulatory agencies may have based their positions on certain court cases in which certain types of regulatory guidance were determined not to constitute "rules" under the APA definition because that guidance was not legally binding. See, e.g., Amoco Production Company v. Watson, 410 F.3d 722, 732 (D.C. Cir. 2005) and Independent Petroleum Ass'n of America v. Babbitt, 92 F.3d 1248, 1255-57 (D.C. Cir. 1996). 

Impact of GAO opinions

The GAO opinions have no direct legally controlling impact on the Issuances. 

However, in the short term:

  • Based on the GAO opinions, Senator Toomey or other members of Congress may insist that the Issuances were improperly issued — and therefore invalid — and press the agencies responsible for each Issuance to submit that Issuance for Congressional review under the CRA; and 
  • The GAO opinions may be used as the basis for arguments in legal challenges against the Issuances in court actions. 

In the longer term, the GAO opinions could have the following impact:

  • Certain bank regulatory agencies may cite the GAO opinions as a reason to avoid issuing new regulatory guidance or even to rescind existing guidance. 
  • Certain bank regulatory agencies may begin to rely more on enforcement actions to provide information about how an agency may interpret and apply certain financial laws and regulations.
  • The GAO opinions may be cited by Congress to disapprove similarly issued bank regulatory guidance under the CRA in the future.  

Potential fallout for banks

The immediate reaction of many bankers and bank trade groups was likely positive with regard to the news of the GAO's opinions that CRA restrictions should be applied to a wide variety of bank regulatory guidance. 

Bankers have been inundated with federal regulations and regulatory guidance for years, and that issue has become more pronounced since the Dodd Frank Act was passed in 2010. If the GAO's opinions are applied, they may effectively reduce this barrage of regulatory guidance that banks have to process.

However, some of the longer term potential fallout from the GAO opinions, as described above, may not always be completely positive for bankers. For example, if regulators refuse to issue informal regulatory guidance, bankers may be less certain about expected compliance standards and may be presented with those standards only in the form of examination citations or enforcement actions. 

In fact, the CFPB has been criticized in the past for taking exactly that type of "gotcha" approach. The president of the U.S. Chamber of Commerce Center for Capital Markets Competitiveness noted in November that "[t]oo often, the CFPB adopted a 'keep them guessing' approach to regulation and supervision."

Next steps

As the new year progresses, it will be interesting to see if and how Congress makes use of the GAO opinions on the applicability of the CRA to informal regulatory guidance that could be characterized as "rules." 

It may be even more interesting to see if any regulators adopt the GAO's broad-scope approach to the CRA and begin limiting the informal issuance of regulatory guidance — regardless of what name that guidance goes by.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions