President Trump Issues Executive Order “Reducing Regulation and Controlling Regulatory Costs”

Posted on February 2nd, 2017 in Consumer Finance, Federal Issues By BuckleySandler

On January 30, President Trump signed an Executive Order aimed at reducing the “costs associated with the governmental imposition of private expenditures required to comply with Federal regulations” and ensuring that such costs are “prudently managed and controlled through a budgeting process.” The measure requires all executive departments and agencies to cut two existing regulations for every new regulation they implement. The Order also establishes a regulatory budget of $0 for FY 2017—meaning that the total incremental cost of all new regulations, when adding the cost burden of any new regulation and then subtracting the cost savings of repealed regulations, can be no greater than $0. Thereafter, beginning in FY 2018, each agency will be required to provide the Office of Management and Budget (OMB) with its best approximation of the total costs or savings to be expected from any new regulations. To the extent such estimates predict an increase in that Agency or department’s “incremental regulatory costs,” such increase will need to be authorized by the OMB (or by congress via a new law).

Details concerning how the new budgeting process and cost-offsetting policy will be implemented are left to the Office of Management and Budget, which is directed to provide agencies with guidance. House Financial Services Subcommittee Chairman Tom Graves sent a January 30 letter to CFPB Director Richard Cordray, seeking clarification as to the Bureau’s stance on whether the Trump Administration’s January 20 “Regulatory Freeze” Memorandum—which is similarly directed at “executive agencies”—applies to the CFPB.

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