Banking and Finance Law Daily Agency heads directed to temporarily freeze all pending regulatory actions
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Thursday, January 21, 2021

Agency heads directed to temporarily freeze all pending regulatory actions

By Stephanie K. Mann, J.D.

According to the memorandum issued by Biden’s new Chief of Staff, the temporary freeze will allow new appointees to review any new or pending rules.

Pending a review from the new Biden administration, a memorandum has been issued for the heads of Executive departments and agencies to freeze all pending regulatory actions. Issued by Ronald A. Klain, the assistant to the President and Chief of Staff, the memorandum emphasizes that the purpose of the temporary freeze is to allow President Biden’s appointees to have the opportunity to review any new or pending rules.

Specifically, the memorandum directs all executive leaders to:

  1. except for emergency situations, not propose or issue any new regulations;
  2. with respect to rules that have been sent to the Office of Financial Research, but not published in the Federal Register, immediately withdraw the rules for review;
  3. with respect to rules that have been published in the Federal Register, but have not taken effect, consider postponing the rules’ effective dates for 60 days until March 21, 2021;
  4. following the 60-day delay in the effective date, if those rules do not raise a substantial question of fact, law, or policy then no further actions need to be taken, but if it does raise a substantial question, then further action should be based on the recommendation of the OMB Director;
  5. notify the OMB Director of any rules that may affect critical health, safety, environmental, financial, or national security matters and should be exempted from the temporary freeze; and
  6. comply with all applicable Executive Orders affecting regulatory management.

Klain concluded the memorandum by stating that if he identified any actions that were taken before noon on Jan. 20, 2021, to frustrate the purpose of the memorandum, he may request that agency heads take additional steps to address those actions.

The memorandum comes after legislative leaders had encouraged President-Elect Biden to suspend "midnight" regulations passed by the Trump administration (see Banking and Finance Law DailyNov. 17, 2020Dec. 4, 2020, and Jan. 15, 2021).

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