At least one group sees little impact on fin. regulators by Trump freeze

Jan. 24, 2017 -- NCUA may be still considering the impact on the agency of President Donald Trump’s regulatory freeze, but at least one law firm in Washington has interpreted the pause in regulating as not likely affecting federal financial institution regulatory agencies..

Meanwhile, a hiring freeze has also been imposed on federal agencies by the Trump administration.

The firm of Davis Polk & Wardwell posted an analysis over the weekend that gives three reasons why the freeze does not affect the financial regulators:

  • The issuance of such a memorandum is a routine part of presidential transition.
  • The regulatory freeze memo (issued Friday, Jan. 20) only applies to executive departments and agencies, and not independent agencies (which makes up most of the financial regulators). “Presidential regulatory memoranda have typically excluded these independent regulatory agencies,” the analysis points out in a footnote. The Trump administration memo additionally does not request that independent agencies voluntarily comply with a regulatory moratorium, as did a similar memorandum issued shortly after the inauguration of President George W. Bush, according to the law firm’s analysis.
  • The Jan. 20 regulatory freeze (in a departure from earlier directives) also freezes issuance of any “guidance document[s]” by an executive agency.

Perhaps as an indication of the scope of the regulatory freeze, a number of federal agencies today filed “letters of withdrawal” for new and proposed rules, in line with Trump’s Jan. 20 order. However, none of the federal financial institution regulatory agencies have done so (as of today).

Meanwhile, on Monday, Trump issued another executive memo, this one freezing hiring at federal agencies. According to the “Presidential Memorandum Regarding the Hiring Freeze” released Monday by the White House, the hiring freeze “applies to all executive departments and agencies regardless of the sources of their operational and programmatic funding, excepting military personnel.”

Additionally, the memo, signed by the president, states that “no vacant positions existing at noon on January 22, 2017, may be filled and no new positions may be created, except in limited circumstances. This order does not include or apply to military personnel.”

Trump asks that federal agencies seek efficient use of existing personnel and funds to improve public services and the delivery services. “Accordingly, this memorandum does not prohibit making reallocations to meet the highest priority needs and to ensure that essential services are not interrupted and national security is not affected,” the Trump directive states.

The memo also pointedly notes that “contracting outside the Government to circumvent the intent of this memorandum shall not be permitted.”


Davis Polk & Wardwell analysis: President Trump’s First-Day Regulatory Moratorium Has Little Impact for Financial Regulation

Presidential Memorandum Regarding the Hiring Freeze