Mooney Introduces the Financial Guidance Review Act
June 30, 2021
WASHINGTON – Congressman Alex X. Mooney (R-WV) introduced the Financial Guidance Review Act (H.R. 4232). This legislation requires financial regulators to conduct an annual review ensuring that non-binding guidance does not have costly and harmful economic effects.
“No guidance should have substantial economic effects, and guidance should not be used as an end-around the normal rulemaking process. This bill strengthens congressional oversight of regulators to ensure that guidance is used to clarify regulation, not further increase regulatory burdens,” said Congressman Mooney.
Congressman Blaine Luetkemeyer (R-MO) signed on as an original cosponsor of the Financial Guidance Review Act.
“Under no circumstances should guidance have a $100 million impact on the American economy. Regulatory guidance is neither a law nor rule. It is merely a suggestion and should therefore be treated that way,” said Congressman Luetkemeyer. “This legislation ensures the financial regulators consistently review guidance and it protects the American economy from burdensome, costly, and non-binding guidance documents.”
Regulators use guidance to clarify their interpretation of existing law. Because guidance is non-binding, it is not subject to the normal regulatory process, which provides opportunities for the public to comment on new rules.
This bill requires the major financial regulators to conduct an annual review of guidance from the previous calendar year to determine if any guidance may cause economic effects of $100 million or more.
The review must be completed within the first six months of the calendar year. Upon completion, the regulators must:
Submit a report to Congress with the results of their review
Revoke any guidance with potential economic effects of $100 million or more
Publish any guidance revoked on their website