The White House on Thursday for the first time said it was requiring the Federal Reserve and other independent agencies to submit new guidelines for review, a controversial step that has long been a goal of conservative groups.
The Fed and other agencies already have to publicly issue proposals, guidelines and rules, but they have not been required to submit all of their regulatory guidelines to the White House first. Importantly, the new restrictions would not apply to the Fed’s actions as it pertains to setting interest rates, but it would apply to many other functions, particularly bank regulation.
The step could have the effect of nullifying or blocking a range of regulatory initiatives, including guidelines issued by the Fed and other bank regulators in 2013 that sought to limit the amount of risky corporate loans issued by banks.
The increased scrutiny would also apply to a range of other agencies and issues, including the Securities and Exchange Commission, the Consumer Product Safety Commission, the Federal Election Commission, and the Commodity Futures Trading Commission.
Although the chairmen of these agencies are often appointed by the president and confirmed by the Senate, their policies are established by the vote of a commission with bipartisan membership. And historically the White House has not had authority over their actions.
While the White House memo didn’t single out any particular agency for scrutiny, the Fed could be one of the most controversial institutions to face oversight.
President Donald Trump has taken an adversarial approach to the Fed in recent months, attacking Fed Chair Jerome Powell and saying he would nominate two major political supporters — Herman Cain and Stephen Moore — to the Fed’s board.
The memo doesn’t stipulate what would happen if an agency refused to submit proposed rules for review.
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