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Biden Administration Orders Regulatory Freeze of New Rules

On the first day in office, President Biden’s Chief of Staff Ron Klain issued a memorandum to all “Heads of Executive Departments and Agencies” requiring a delay in rules not yet published until review by a new Presidential appointee or designee can be completed. 

The memorandum lays out several categories of new rules and how they should be handled in the near future:

  1.  Rules not yet published in the Federal Register but sent to the Office of the Federal Register (“OFR”) are required to be withdrawn from the OFR and not published.  These rules must be reviewed by a new presidential appointee or designee before resubmission to the OFR. 
  2. Rules that have been published in the Federal Register, or otherwise issued, but which have not yet taken effect, the memorandum encourages the relevant department or agency to consider delaying the effective date of the rule for 60 days and including a new 30-day comment period as part of a broader review.  After the 60-day review period, the department or agency is required to determine which rules raise substantial questions of fact, law, or policy. Those which do raise such questions require further consultation with the OMB director before taking further action.  Other rules may continue to take effect in accordance with the 60-day delay.

It is yet unclear the impact this freeze may have on rules recently published by the CFPB, such as the revised General QM definition and the new Seasoned QM category, which have not yet taken effect but have been published in the Federal Register.  Additionally, it is unclear the applicability of the memorandum to “executive departments and agencies” would apply to the CFPB after considering the impacts of Seila Law v. CFPB.  The memorandum relies on the general Administrative Procedures Act definition for rule as well as makes clear it is intended to apply broadly to any “regulatory action”.