Congressional Review Act: GAO Determines That Banking Agencies’ Leveraged Lending Guidance is a “Rule” and Therefore Subject to the Requirements of the Congressional Review Act

Sullivan & Cromwell LLP - October 20, 2017
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Yesterday, the Government Accountability Office (“GAO”) released a significant decision (the “GAO Determination”) determining that the March 21, 2013, Interagency Guidance on Leveraged Lending (the “Guidance”), issued jointly by the Board of Governors of the Federal Reserve System (“Federal Reserve”), the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (together, the “Banking Agencies”), is a “rule” for purposes of the Congressional Review Act (“CRA”).  The CRA provides that a “rule” cannot “take effect” until the promulgating agency submits two required reports to Congress and the Comptroller General of the United States, the filing of which triggers the application of the CRA’s provisions allowing for Congressional review – and potential disapproval – of the rule.  These reports were not filed with respect to the Guidance.  Accordingly, it would appear that the Guidance is not effective under the terms of the CRA until and unless the Banking Agencies formally submit the reports.