We have previously written about the Congressional Review Act (“CRA”), a law that establishes a procedure by which Congress can nullify a covered rule adopted by a federal agency. According to a memorandum prepared by the Congressional Research Service (“CRS”), the CRA “was largely intended to assert control over agency rulemaking by establishing a special set of expedited or ‘fast track’ legislative procedures for this purpose, primarily in the Senate.”
Before a covered rule can take effect, the CRA requires the federal agency promulgating the covered rule to submit, to each House of Congress and to the Comptroller General, a report that includes a copy of the rule, a general statement relating to the rule, and the proposed effective date of the rule. The CRA affords Congress an opportunity to review the rule and to submit and act upon a joint resolution disapproving it. While a joint resolution of disapproval must be approved by both Houses of Congress, it cannot be filibustered in the Senate and can be passed with only a simple majority. A joint resolution of disapproval that is passed by both Houses of Congress is then sent to the President for executive approval or veto.
The CRA been used only once to nullify a covered rule adopted by a federal agency. Specifically, the controversial ergonomics rule adopted by the Occupational Safety and Health Administration toward the end of the Clinton Administration was successfully nullified pursuant to the CRA when the subsequent inauguration of a Republican President resulted in the same political party controlling both Houses of Congress and the Presidency. While this political scenario rarely occurs, it was replicated by the election of President Trump and the retention of Republican control of the Senate and the House of the Representatives. As a result, a number of joint resolutions of disapproval have been introduced in the new Congress with respect to various “midnight rules” that are eligible for congressional review.
We have noted previously that the prepaid card rule adopted by the CFPB in October 2016 remains potentially subject to congressional nullification. Pursuant to the CRA, the Government Accountability Office issued its report concerning the prepaid account rule to the Chairmen and Ranking Members of the relevant House and Senate Committees on December 13, 2016.
On February 1, 2017, Senator David Perdue (R-Ga) initiated the nullification process with respect to the rule by introducing a joint resolution, S. J. Res. 19, providing “[t]hat Congress disapproves the rule submitted by the Bureau of Consumer Financial Protection relating to prepaid accounts under the Electronic Funds Transfer Act (15 U.S.C. 1693 et seq.) and the Truth in Lending Act (15 U.S.C. 1601 et seq.) (81 Fed. Reg. 83934 (November 22, 2016)), and such rule have no force or effect.” The joint resolution has been referred to the Senate Committee on Banking, Housing and Urban Affairs.
We will continue to monitor the joint resolution of disapproval. If the joint resolution of disapproval ultimately is enacted, the CRA would prohibit the Bureau from reissuing the rule “in substantially the same form” or issuing a “new rule that is substantially the same” as the disapproved rule “unless the reissued or new rule is specifically authorized by a law enacted after the date of the joint resolution disapproving the original rule.”
