Pub. 12 2017-2018 Issue 4

NEBRASKA BANKERS ASSOCIATION 13 Counselor’s Corner — continued on page 14 COUNSELOR’S CORNER W HAT’S THE CONGRESSIONAL Review Act (CRA)¹ , you ask? If you don’t know, you’re not alone. For more than 16 years, Congress has been silent as to its use. A relatively obscure law, the CRA establishes a special set of procedures through which Congress can nullify final regulations issued by a federal agency. The CRA is an oversight tool Congressmay use to prevent a regulation issued by a federal agency from taking effect. Prior to the Trump administration, only once has an adopted rule been in- validated under the CRA—that occurred in 2001, when a rule on ergonomic stan- dards, adopted by the Occupational Safety andHealth Administration (OSHA) at the end of the Clinton administration, was disapproved in the early days of the Bush administration. The CRA gives a succes- sor president and Congress, when acting together, an easier route to overturn the midnight rules of an outgoing presidential administration. Once a new president settles in and reorganizes the direction of his or her administrative state, the CRA typically loses its utility. Congressional ReviewAct In simple terms, the CRA grants Congress: (1) proper notification of new agency regulations and (2) the authority to use a joint resolution of disapproval to overturn a rule. Under the CRA, Congress is empowered to review new federal rules issued by federal agencies and to nullify those rules through an expedited legisla- tive process. The law provides Congress with 60 legislative days (or days in which Congress is in a particular session) to overturn a rule by submitting a “joint resolution of disapproval,” which only requires approval by a simple majority in both chambers.² Importantly, the CRA establishes a special set of “fast track” legislative procedures that effectively make a joint resolution of disapproval filibuster-proof in the Senate. If the reso- lution is signed by the president, the CRA provides that the rule at issue shall not take effect (or continue)³ and may not be reissued in “substantially the same form” unless Congress approves the rule with a new law.⁴ In other words, if disapproved, the rule no longer has the force of law and compliance is no longer required. Although the current president and Congress have already successfully used the CRA on several occasions⁵, the first Consumer Financial Protection Bureau (CFPB) rule fell victim to the CRA in late October 2017. The current political condi- tions are ripe for further congressional use and the CFPB has been put on notice. CFPB Arbitration Rule In the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), Congress directed the CFPB to study pre-dispute arbitra- tion agreements and issue regulations restricting the use of arbitration agree- ments if such rules would be in the “public interest” and for the “protection of con- sumers.”⁶ Dodd-Frank required that the findings in any such rule be consistent with the study. A three-year study was conducted and the CFPB released its results in March 2015. The CFPB found that barring certain financial providers from blocking consumer class actions through arbitration agreements would better enable consumers to enforce their rights and obtain redress when their rights are violated.⁷ After the release of the study, the CFPB issued a proposed arbitration rule on May 24, 2016. On July 10, 2017, the CFPB published a final arbitration rule⁸ effective September 18, 2017, with a March 19, 2018, mandatory compliance date. There were two parts to the arbi- tration rule. First, the rule prohibited covered providers of consumer financial products and services from relying on pre-dispute arbitration agreements to prevent consumers from pursuing class actions in court and required language in arbitration agreements reflecting this THE OTHER CRA Jeff Makovicka, Kutak Rock LLP