Sen. Sherrod Brown (D-Ohio), ranking member of the Senate Banking Committee, and Rep. Maxine Waters (D-Calif.), chair of the House Financial Services Committee, have called for a pause in rulemakings from federal regulators unless they are designed to help during the coronavirus (“COVID-19”) outbreak.
Sen. Brown wants focus placed on “providing reliable guidance and responding to the health and economic effects of this crisis rather than on processing other rulemakings.”
In a letter dated March 17, Sen. Brown urged the Federal Reserve Board to halt its pre-existing rulemaking work and “instead focus and prioritize actions on activities related to the economic risks posed to markets” by COVID-19.
Similar requests were set out in letters addressed to the heads of the Consumer Financial Protection Bureau, Federal Deposit Insurance Corp., Federal Housing Finance Agency, Office of the Comptroller of the Currency, National Credit Union Administration, and Securities and Exchange Commission.
Sen. Brown also called on the Department of Housing and Urban Development to similarly table any pending rulemakings that are not tied to the pandemic response effort.
Federal financial regulators had a number of significant rulemaking initiatives underway before the pandemic struck. These include: revisions to measures implementing restrictions on banks’ fund investment activities, issuing consumer protection rules for the debt collection industry, and overhauling Community Reinvestment Act regulations for the first time in years.
With comment periods on proposals associated with those three projects set to end in the coming weeks, Sen. Brown argues that the public will not have the bandwidth to provide meaningful feedback on anything but pandemic-related rulemaking proposals.
“During this period, all rulemakings and comment periods closing after March 1, 2020, that are not related to the virus response or other imminent health, safety or national security threats should be suspended or extended for at least 45 days,” Sen. Brown urged.
Energies are better spent right now on “advancing the public health and worker protections, increasing access to nutrition services, enhancing our nation’s safety, and protecting the financial needs of individuals and families facing economic hardship as a result of the virus and response,” Sen. Brown said.
The Credit Union National Association also sent a letter to the CFPB calling for it to “suspend all pending rulemakings – and not propose additional rulemakings – except those intended to reduce regulatory burden or to facilitate credit unions service to members during this crisis.”
Trade associations seem to echo Sen. Brown’s concerns – editorializing that it is not, in the short-term, critical to move forward on rulemaking during declared national emergency, given that the information gathering process will be compromised.
The FDIC declined to comment on Sen. Brown’s correspondence. An OCC spokesperson said on March 18 that “[t]he OCC continues to conduct ordinary business and will consider rulemakings and other regulatory [sic] in due course to maintain the safe, sound, fair operation of the federal banking system.”
A spokesperson for HUD, which just concluded a comment period on the Affirmatively Furthering Fair Housing regulations on March 16, said, “Sen. Brown should spend less time playing politics with the coronavirus, and instead focus his energies on quickly approving the economic stimulus the [P]resident has called for.”
For those who want to make sure that rule changes are not rushed through federal agencies while the nation is distracted by a pandemic, these are not likely to be encouraging responses. The SEC, however, responded with an announcement that, in light of the challenges associated with COVID-19, and particularly the difficulty associated with submission of comment letters, it will not take formal action before April 24 on a number of different proposed rulemakings with comment periods otherwise set to expire in March.
Here are the specific actions that will remain open for comment.