Last Wednesday, President Trump signed his fifteenth congressional resolution disapproving a federal regulation. This was notable not only because, prior to this year, only one such resolution had ever been enacted, but also because it was the first time a president had disapproved a regulation issued during his own tenure. This, along with new opinions from the Government Accountability Office and Senate Parliamentarian, may have breathed new life into the 21-year old statute on which these disapprovals depend, the Congressional Review Act (CRA).

The Congressional Review Act

The CRA allows majorities in both houses of Congress to use expedited procedures to disapprove recent regulations. Congress has 60 legislative days after a final rule is issued to review it and send a “joint resolution of disapproval” to the president. If the president signs the resolution, not only can the rule not take effect but the agency cannot issue another one that is “substantially the same” without express authority from Congress.

Between January and May of this year, Congress and the president used the CRA to overturn 14 regulations that President Obama had issued on his way out the door. Though the CRA was enacted in 1996, it had only been used once before, to disapprove an Occupational Safety and Health Administration ergonomics regulation issued at the end of the Clinton Admin­istration. The circumstances of that disapproval were similar to those underlying the spate of disapprovals earlier this year. In both instances, a new Congress and a new president (of different parties from the outgoing president) used the CRA to overturn regulations issued at the end of the previous administration.

Thus, the CRA has been regarded as a tool for the incoming Congress and president to overturn a departing president’s “midnight” regulations and gain some control over the regulatory agenda, but otherwise largely irrelevant.

A CRA “First”

President Trump’s signature on the resolution disapproving a Consumer Financial Protection Bureau (CFPB) rule last week changes that narrative. It marks the first time a president has disapproved a regulation issued during his tenure, and shows that rules issued by independent regulatory agencies may be ripe for review. While, like his predecessors, President Trump is unlikely to sign a resolution disapproving a rule one of his cabinet agencies issues, he may welcome a chance to reverse an independent agency, like the CFPB. Presidents have less control over the heads of those agencies, and the regulations they produce may not reflect presidential priorities. Both Congress and the president have railed against the “unaccountable Richard Cordray” at the CFPB’s helm, and the CRA allows them to take responsibility and make his actions more accountable to elected officials.

More applications of the CRA ahead?

Perhaps an even more significant sign that the CRA is still viable is a new Government Accountability Office (GAO) letter confirming that the law gives Congress the ability to veto agency guidance documents. Responding to a request from Senator Pat Toomey (R-PA), GAO stated that a guidance on leveraged lending issued jointly more than four years ago by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation, was a “rule” for purposes of the CRA.

Importantly, the GAO letter provided detail as to why this guidance met the CRA’s definition of a rule, putting hundreds or even thousands of such sub-regulatory statements within the scope of congress’s disapproval powers. This is because, as Todd Gaziano of the Pacific Legal Foundation (PLF) has pointed out, the 60-day review clock is triggered by a rule’s final publication in the Federal Register or when a report on the rule is sent to Congress, whichever comes later. As a former Congressional Research Service analyst documented, agencies neglected to submit reports to GAO for hundreds of rules since the CRA’s passage in 1996. The broad definition of “rule” the GAO confirmed in the Toomey letter expands those numbers to thousands. Gaziano argues this means that “for all the many rules that agencies failed to submit, the time for Congress to disapprove them has not yet begun to run.”

What next?

What might happen with the rules and guidance documents for which agencies never submitted a report to Congress as required by the CRA? That’s not exactly clear. As amended by the CRA, the Administrative Procedure Act prevents rules and guidelines from going into effect before they are submitted to Congress. This could mean that thousands of rules thought to be in effect technically never were. PLF argues “the administration could, in many cases, simply publish notice that a rule not in effect is being abandoned, reevaluated, or potentially modified.”

Indeed, last Thursday, Congressman Blaine Luetkemeyer, chairman of the House Financial Services Subcommittee, sent a letter to the heads of the three agencies responsible for the leveraged lending guidance asking them to confirm they will not enforce it, and “conduct a zero-based review” of any other guidance or supervisory letters not submitted to Congress under the CRA to determine which should be submitted.

These recent actions may also pave the way for private litigation. Attorneys whose clients are facing enforcement actions, permit denials, or other government proceeding could argue in court that the applicable regulation is not effective, since it never went through CRA review. Of course, this could work both ways. If a company relied on an agency rule or guidance document that is deemed ineffective, they could be found in violation of law. For example, imagine an EPA rule that replaced paper reports with electronic reporting. If that electronic reporting rule is deemed ineffective, those who complied with it will be in violation of the previous paper rule.

Senate Parliamentarian may have confused matters

A new twist emerged last week. According to the Wall Street Journal, “the Senate parliamentarian has found that the GAO ruling counts as the official report” triggering the review clock for the interagency leveraged lending guidance that Senator Toomey had asked about. This means that Congress now has 60 legislative days to review the guidance and send a resolution to the president.  Courts are likely to interpret failure to do so as mooting the argument that the issuing agency had violated the CRA when it originally issued the rule.

The parliamentarian opinion may also unleash a flurry of requests for GAO rulings that could trigger review of other existing guidance documents, making it hard for GAO and Congress to manage the agenda. Regardless of what happens next, the CRA does not appear ready to be put on hold until the next transition.

Susan E. Dudley is Director of the George Washington University Regulatory Studies Center and  Distinguished Professor of Practice at the Trachtenberg School of Public Policy & Public Administration.