Latest news with #deregulation
Yahoo
4 hours ago
- Business
- Yahoo
Exclusive-DOGE now targeting SEC policy, eyes SPAC rules, sources say
By Douglas Gillison and Chris Prentice WASHINGTON/NEW YORK (Reuters) -President Donald Trump's Department of Government Efficiency initiative has pushed the U.S. markets watchdog to loosen Wall Street rules around blank-check companies and confidential reporting by private investment funds, according to two people familiar with the matter. DOGE officials at the SEC, who have so far focused on cutting costs, have in recent weeks sought meetings with staff to explore relaxing what some companies have described as burdensome and unnecessary regulations, including reworking Biden-era rules adopted last year on so-called Special Purpose Acquisition Companies, or SPACs, and requirements that private investment advisers confidentially disclose more data so regulators can better spot systemic risk, the sources said. The efforts, which have not been previously reported, are part of a broader deregulatory push by the administration, which has said it wants to spur economic growth by slashing government oversight. In a February executive order, Trump directed DOGE officials at federal agencies to identify regulations the administration may seek to eliminate for any of a range of different reasons, such as imposing "undue burdens" or costs on businesses. But the same sources, who requested anonymity to speak about confidential discussions, said DOGE's involvement in crafting new policy has rankled some SEC officials, raising concerns over whether a White House initiative should be involved in the core work of an agency long seen as independent. Under the Biden administration, the SEC adopted the SPAC and private funds regulations to protect investors from potentially unscrupulous claims by investment promoters and prevent the unchecked buildup of risks to financial stability in the private funds sector. Taylor Rogers, a White House spokesperson, said DOGE was working with the SEC "to more efficiently maintain fair and orderly markets while protecting everyday investors." "Under President Trump's leadership, Chairman [Paul] Atkins and the SEC will ensure that the United States remains the best and most secure place in the world to invest and do business." A spokesperson for the SEC said: "The SEC is working with DOGE to find cost efficiencies and ensure public funds are being used as effectively as possible." The SEC and White House did not comment further on Reuters' questions for this story. To be sure, the commission is led by a presidentially appointed chairman who guides the agency's regulatory agenda, making it rare for the agency to depart drastically from White House priorities, current and former officials told Reuters. But the SEC, like other financial regulators, has long been treated as independent from the White House - both through legal protections and decades of norms, those experts said. The agency has traditionally limited communications with the White House over rules to avoid political interference, or the appearance of it. Trump and key players in his administration have taken a view that these agencies should be under direct supervision of the White House and Trump has fired officials who say they are legally shielded from dismissal in most cases. Amanda Fischer, policy director and chief operating officer at financial reform advocacy group Better Markets, said any DOGE involvement in SEC rulemaking raises serious concerns about potential conflicts of interest and political influence overriding staff expertise. "It's outrageous that outside designees to the agency, who presumably were not selected by the chair, would have a say in rulemaking activities," said Fischer, who previously served as chief of staff to former SEC Chair Gary Gensler. KICK IN THE PANTS? It is unclear what impact, if any, the DOGE efforts will have. Much of the deregulatory pressure appears in line with traditional Republican views that the SEC may have pursued under new leadership anyway. Indeed, Republican SEC Commissioners Mark Uyeda and Hester Peirce have in the past both objected to what they said were needless regulatory burdens for SPACs and private funds. Some movement on dismantling such regulations is already underway. The SEC has been in talks with U.S. exchange operators to loosen some regulatory requirements for SPACs, in which shell companies raise funds through a listing with the intention of acquiring a private company, already under discussion, Reuters reported earlier this week. SPACs are listed shell companies that raise funds to acquire a private company with the purpose of taking it public, allowing such targets to sidestep a traditional initial public offering. Taking companies public via SPAC had been booming business and a strategy deployed by Lucid Motors, DraftKings and Trump's social media operation. The SEC under Biden cracked down on the sector amid concerns over weak diligence compared to the more rigorous IPO process, and over hidden costs to retail investors. But interest in SPACs has again risen. In one instance, several of the people involved in the Trump Media transaction disclosed plans earlier this year to pursue a SPAC deal in the tech sector, possibly involving cryptocurrency. They did not respond to requests for comment. SPAC advocates warned against the SEC's stricter rules, concerned over changes such as the removal of a "safe harbor" that had helped shield SPAC sponsors from legal liability for unrealistic or potentially misleading financial projections. Uyeda and Peirce at the time both objected to the changes, saying the rule would unduly inhibit a potentially valuable investor tool. The Republican commissioners also objected to additional reporting requirements for private funds the SEC and another agency voted for in February 2024, known as Form PF. The SEC earlier this month decided to delay firms' compliance with those new requirements. Some experts told Reuters they support a push to reduce old or outdated regulations, even if DOGE is involved. "I daresay it is a departure from past practice, but whether White House influence is a 'risk' or an opportunity depends on your perspective," said Adam Pritchard, a law professor at the University of Michigan. "I am quite open to the idea that the staff could use a good kick in the pants to get them to repeal a few [rules]. I'll bet Paul Atkins agrees with that instinct." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
4 hours ago
- Business
- Reuters
Exclusive: DOGE now targeting SEC policy, eyes SPAC rules, sources say
WASHINGTON/NEW YORK, July 1 (Reuters) - President Donald Trump's Department of Government Efficiency initiative has pushed the U.S. markets watchdog to loosen Wall Street rules around blank-check companies and confidential reporting by private investment funds, according to two people familiar with the matter. DOGE officials at the SEC, who have so far focused on cutting costs, have in recent weeks sought meetings with staff to explore relaxing what some companies have described as burdensome and unnecessary regulations, including reworking Biden-era rules adopted last year on so-called Special Purpose Acquisition Companies, or SPACs, and requirements that private investment advisers confidentially disclose more data so regulators can better spot systemic risk, the sources said. The efforts, which have not been previously reported, are part of a broader deregulatory push by the administration, which has said it wants to spur economic growth by slashing government oversight. In a February executive order, opens new tab, Trump directed DOGE officials at federal agencies to identify regulations the administration may seek to eliminate for any of a range of different reasons, such as imposing "undue burdens" or costs on businesses. But the same sources, who requested anonymity to speak about confidential discussions, said DOGE's involvement in crafting new policy has rankled some SEC officials, raising concerns over whether a White House initiative should be involved in the core work of an agency long seen as independent. Under the Biden administration, the SEC adopted the SPAC and private funds regulations to protect investors from potentially unscrupulous claims by investment promoters and prevent the unchecked buildup of risks to financial stability in the private funds sector. Taylor Rogers, a White House spokesperson, said DOGE was working with the SEC "to more efficiently maintain fair and orderly markets while protecting everyday investors." "Under President Trump's leadership, Chairman [Paul] Atkins and the SEC will ensure that the United States remains the best and most secure place in the world to invest and do business." A spokesperson for the SEC said: "The SEC is working with DOGE to find cost efficiencies and ensure public funds are being used as effectively as possible." The SEC and White House did not comment further on Reuters' questions for this story. To be sure, the commission is led by a presidentially appointed chairman who guides the agency's regulatory agenda, making it rare for the agency to depart drastically from White House priorities, current and former officials told Reuters. But the SEC, like other financial regulators, has long been treated as independent from the White House - both through legal protections and decades of norms, those experts said. The agency has traditionally limited communications with the White House over rules to avoid political interference, or the appearance of it. Trump and key players in his administration have taken a view that these agencies should be under direct supervision of the White House and Trump has fired officials who say they are legally shielded from dismissal in most cases. Amanda Fischer, policy director and chief operating officer at financial reform advocacy group Better Markets, said any DOGE involvement in SEC rulemaking raises serious concerns about potential conflicts of interest and political influence overriding staff expertise. "It's outrageous that outside designees to the agency, who presumably were not selected by the chair, would have a say in rulemaking activities," said Fischer, who previously served as chief of staff to former SEC Chair Gary Gensler. It is unclear what impact, if any, the DOGE efforts will have. Much of the deregulatory pressure appears in line with traditional Republican views that the SEC may have pursued under new leadership anyway. Indeed, Republican SEC Commissioners Mark Uyeda and Hester Peirce have in the past both objected to what they said were needless regulatory burdens for SPACs and private funds. Some movement on dismantling such regulations is already underway. The SEC has been in talks with U.S. exchange operators to loosen some regulatory requirements for SPACs, in which shell companies raise funds through a listing with the intention of acquiring a private company, already under discussion, Reuters reported earlier this week. SPACs are listed shell companies that raise funds to acquire a private company with the purpose of taking it public, allowing such targets to sidestep a traditional initial public offering. Taking companies public via SPAC had been booming business and a strategy deployed by Lucid Motors, DraftKings and Trump's social media operation. The SEC under Biden cracked down on the sector amid concerns over weak diligence compared to the more rigorous IPO process, and over hidden costs to retail investors. But interest in SPACs has again risen. In one instance, several of the people involved in the Trump Media transaction disclosed plans earlier this year to pursue a SPAC deal in the tech sector, possibly involving cryptocurrency. They did not respond to requests for comment. SPAC advocates warned against the SEC's stricter rules, concerned over changes such as the removal of a "safe harbor" that had helped shield SPAC sponsors from legal liability for unrealistic or potentially misleading financial projections. Uyeda and Peirce at the time both objected to the changes, saying the rule would unduly inhibit a potentially valuable investor tool. The Republican commissioners also objected to additional reporting requirements for private funds the SEC and another agency voted for in February 2024, known as Form PF. The SEC earlier this month decided to delay firms' compliance with those new requirements. Some experts told Reuters they support a push to reduce old or outdated regulations, even if DOGE is involved. "I daresay it is a departure from past practice, but whether White House influence is a 'risk' or an opportunity depends on your perspective," said Adam Pritchard, a law professor at the University of Michigan. "I am quite open to the idea that the staff could use a good kick in the pants to get them to repeal a few [rules]. I'll bet Paul Atkins agrees with that instinct."
Reuters
4 hours ago
- Business
- Reuters
Deregulation Orders Under the Second Trump Administration Practical Law The Journal
The second Trump administration has issued a number of broadly applicable executive orders and releases on deregulation designed to reduce rulemaking, eliminate certain existing rules, and exert broad presidential control over most federal regulatory agencies. These orders and releases have the potential to disrupt or even upend the modern US federal regulatory system, as well as many regulatory areas, including capital markets and finance, health care, the environment, energy, trade and investment, antitrust, consumer protection, and labor and employment. Market participants in regulated industries and their counsel must stay informed as these orders are implemented and their impact trickles down through various federal regulators. This article provides an overview of these developments and their implications for federal regulation. (For a collection of resources and commentary to help counsel manage developments arising during the second term of the Trump administration, see Trump Administration Toolkit on Practical Law; for the complete version of this resource, which includes information on Executive Order 14294 concerning 'overcriminalization' in federal regulations, see Deregulation Orders Under Second Trump Administration on Practical Law.) Freeze on New Rules Pending Administration Review On January 20, 2025, the White House issued a release (freeze order) referred to as a presidential action, ordering 'all executive departments and agencies' to: Refrain from proposing or issuing any rule in any manner, including by sending a rule to the Office of the Federal Register (OFR), until a department or agency head appointed or designated by the president reviews and approves the rule. The department or agency head may delegate this power of review and approval to any other person appointed or designated by the president, consistent with applicable law. Immediately withdraw any rules that have been sent to the OFR but not published in the Federal Register, so that they can be reviewed and approved. Consider: postponing for 60 days from the date of the freeze order the effective date for any rules that have been published in the Federal Register, or any rules that have been issued but have not taken effect, for the purpose of reviewing any questions of fact, law, and policy that the rules may raise; opening a comment period during this 60-day period to allow interested parties to provide comments about issues of fact, law, and policy raised by the rules postponed under the freeze order; re-evaluating 'pending petitions' involving such rules; and 'further delaying, or publishing for notice and comment, proposed rules further delaying' such rules beyond the 60-day period, as appropriate and consistent with applicable law, and where necessary to continue to review these questions of fact, law, and policy. Consult with the director or acting director of the Office of Management and Budget (OMB director) for rules that raise substantial questions of fact, law, or policy. Comply in all circumstances with any applicable executive orders concerning regulatory management. If rules do not raise substantial questions of fact, law, or policy during the 60-day postponement, no further action needs to be taken. Under the freeze order, the OMB director may exempt any rule deemed necessary to address emergency situations or other urgent circumstances, including rules subject to statutory or judicial deadlines that require prompt action. The term 'rule' in the freeze order follows the definition set out in the Administrative Procedure Act (APA) (5 U.S.C. § 551(4)). The freeze also applies to any: Regulatory action, as defined in Section 3(e) of Executive Order 12866, Regulatory Planning and Review (Sept. 30, 1993), as amended. Guidance document, as defined in Section 2(b) of Executive Order 13891, Promoting the Rule of Law Through Improved Agency Guidance Documents (Oct. 9, 2019), when that order was in effect. The freeze order expressly applies to any substantive action by an agency (normally published in the Federal Register) that 'promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking,' as well as to 'any agency statement of general applicability and future effect that sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulatory issue.' The freeze order directs that any communications regarding any matters relating to this review be addressed to the OMB director. Offsetting New Regulations On January 31, 2025, President Trump signed Executive Order 14192, Unleashing Prosperity Through Deregulation (Deregulation EO), which requires: Federal agencies that promulgate a new rule, regulation, or guidance to identify at least ten existing rules, regulations, or guidance documents to be repealed. Any new incremental costs associated with new regulations, to the extent permitted by law, to be offset by eliminating existing costs associated with at least ten prior regulations. The OMB director to identify and eliminate regulations, standardize cost measurements, and ensure compliance with the APA. The OMB director to provide the heads of agencies guidance on implementing this executive order, which includes, but is not limited to: processes for standardizing the measurement and estimation of regulatory costs; standards for determining what qualifies as new and offsetting regulations; standards for determining the costs of existing regulations that are considered for elimination; processes for accounting for costs in different fiscal years; methods to oversee the issuance of rules with costs offset by savings at different times or different agencies; and emergencies and other circumstances that might justify individual waivers of the requirements of this section. The total incremental cost of all new regulations, including repealed regulations, in fiscal year 2025 to be significantly less than zero. The head of each agency to: identify the offsetting regulations on an aggregated basis for regulations that increase incremental cost (as described in the Deregulation EO); and provide the agency's best approximation of the total costs or savings associated with each new regulation or repealed regulation. The OMB director to identify for each agency the total amount of additional incremental costs that will be allowed for that agency in issuing new regulations and repealing regulations during each fiscal year after fiscal year 2025. Expanded Oversight of Federal Agencies On February 18, 2025, President Trump signed Executive Order 14215, Ensuring Accountability for All Agencies (Oversight EO), which expands White House oversight of federal regulatory agencies, including independent agencies (as defined in 44 U.S.C. § 3502(5)) like the Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), and Federal Communications Commission (FCC) (for more information, see Federal Independent Agencies in the June 2025 issue of Practical Law The Journal). Under the Oversight EO: All executive departments and agencies, including independent regulatory agencies, must submit for review all proposed and final significant regulatory actions to the Office of Information and Regulatory Affairs (OIRA) within the Executive Office of the President before publication in the Federal Register. Independent regulatory agencies must consult with the White House on their priorities and strategic plans, and the White House will set their performance standards. The attorney general, subject to the president's supervision and control, will provide authoritative interpretations of law for the executive branch. The Oversight EO notes that it: Does not apply to the Board of Governors of the Federal Reserve System (Federal Reserve Board) or to the Federal Open Market Committee in its conduct of monetary policy. Applies to the Federal Reserve Board in relation only to its supervision and regulation of financial institutions. The Oversight EO requires the OMB director to: Provide guidance on implementation of the Oversight EO to the heads of executive departments and agencies submitting new regulatory actions for review under the Oversight EO. Agency submissions by independent regulatory agencies may begin within the earlier of 60 days from the date of the Oversight EO or completion of the implementation guidance. Establish performance standards and management objectives for independent agency heads, as appropriate and consistent with applicable law, and report periodically to the president on their performance and efficiency in attaining these standards and objectives. Review on an ongoing basis the independent regulatory agencies' obligations for consistency with the president's policies and priorities. Consult on an ongoing basis with independent regulatory agency chairs and adjust the agencies' apportionments by activity, function, project, or object, as necessary and appropriate, to advance the president's policies and priorities. The adjustments to apportionments may prohibit independent regulatory agencies from expending appropriations on particular activities, functions, projects, or objects, provided the restrictions are consistent with law. Additionally, each independent regulatory agency chair or head must: Regularly consult with and coordinate policies and priorities with the OMB director and the directors of the White House Domestic Policy Council and the White House National Economic Council. Establish a White House liaison position in each agency. Submit an agency strategic plan developed under the Government Performance and Results Act of 1993 (Pub. L. 103-62, 107 Stat. 285 (1993)) to the OMB director for clearance before finalization. The fact sheet accompanying the Oversight EO states that Article II of the US Constitution vests all executive power in the president, 'meaning that all executive branch officials and employees are subject to his supervision.' The Oversight EO asserts that previously the independent agencies 'have exercised enormous power over the American people without Presidential oversight.' Rescission or Modification of 'Unlawful Regulations' On February 19, 2025, the Trump administration issued Executive Order 14219, Ensuring Lawful Governance and Implementing the President's 'Department of Government Efficiency' Deregulatory Initiative (DOGE EO), which: Sets out a process for identifying, reviewing, and rescinding or modifying 'unlawful regulations.' Provides directives to agency heads regarding revised priorities for handling new and ongoing enforcement actions. 'Unlawful Regulations' and Regulations That 'Undermine the National Interest' The DOGE EO instructs agency heads, in coordination with their DOGE team leads (as described in Executive Order 14158, Establishing and Implementing the President's 'Department of Government Efficiency' Deregulatory Initiative (Jan. 20, 2025)) and the OMB director, to initiate a process to review all regulations subject to their sole or joint jurisdiction for consistency with law and administration policy. Within 60 days of the date of the DOGE EO, agency heads, in consultation with the attorney general as appropriate, are instructed to identify regulations that: Are 'unconstitutional' or 'raise serious constitutional difficulties,' such as those 'exceeding the scope of the power vested in the Federal Government by the Constitution.' Are based on: 'unlawful delegations of legislative power'; or 'anything other than the best reading of the underlying statutory authority or prohibition.' Implicate matters of social, political, or economic significance 'that are not authorized by clear statutory authority.' Impose: 'significant costs upon private parties that are not outweighed by public benefits'; or 'undue burdens' on small business and impede private enterprise and entrepreneurship. '[H]arm the national interest by significantly and unjustifiably impeding' technological innovation, infrastructure development, disaster response, inflation reduction, research and development, economic development, energy production, land use, and foreign policy objectives. In conducting this review, agency heads are instructed to: Prioritize review of those rules that 'satisfy the definition of 'significant regulatory action'' in Executive Order 12866 (Regulatory Planning and Review), as amended, issued September 30, 1993. Provide a list of all regulations, classified in accordance with the DOGE EO guidelines, to the administrator of OIRA within OMB within 60 days of the date of the DOGE EO. Agencies are instructed to follow the processes set out in Executive Order 12866 for submitting regulations for review by OIRA. The administrator of OIRA is then instructed to consult with agency heads to develop a 'Unified Regulatory Agenda that seeks to rescind or modify these regulations, as appropriate.' Agency heads are further instructed to consult with their DOGE team leads and the administrator of OIRA on potential new regulations as soon as practicable. In evaluating any potential new regulations, agency heads, DOGE team leads, and the administrator of OIRA are instructed to consider, in addition to the factors set out in Executive Order 12866, the factors set out in the DOGE EO. Revised Enforcement Priorities The DOGE EO establishes revised priorities for handling new and ongoing enforcement actions and instructs agency heads to: '[P]reserve their limited enforcement resources by generally de-prioritizing actions to enforce regulations that are based on anything other than the best reading of a statute and de-prioritizing actions to enforce regulations that go beyond the powers vested in the Federal Government by the Constitution,' subject to their obligation to discharge their legal obligations, protect public safety, and advance the national interest. Determine whether ongoing enforcement of any regulations identified in their regulatory review is compliant with law and administration policy. Agency heads, in consultation with the OMB director, are instructed to 'direct the termination of all such enforcement proceedings that do not comply with the Constitution, laws, or Administration policy,' on a case-by-case basis and 'as appropriate and consistent with applicable law.' The DOGE EO instructs the OMB director to issue implementation guidance, as appropriate, and provides the OMB with the authority to issue exemptions from application of the DOGE EO. The DOGE EO language, together with the process specified in the EO, introduces the potential for subjective decision-making and inconsistency into determinations on amendments or other action on existing rules that are well established, provide market utility, or had a sound basis for agency adoption. The DOGE EO does not apply to any: Action related to a military, national security, homeland security, foreign affairs, or immigration-related function of the US. Matter pertaining to the executive branch's management of its employees. The DOGE EO includes broad language without definition (for example, 'best reading') and grants wide discretion to agency heads and acting heads to identify for rescission or amendment regulations that they believe fit the criteria set out in the DOGE EO. The DOGE EO language, together with the process specified in the EO, introduces the potential for subjective decision-making and inconsistency into determinations on amendments or other action on existing rules that are well established, provide market utility, or had a sound basis for agency adoption. Repeal of 'Unlawful Regulations' On April 9, 2025, the Trump administration issued a presidential memorandum (PM) entitled Directing the Repeal of Unlawful Regulations, which directs federal regulatory agency heads to prioritize repeal of regulations that are 'unlawful' under ten notable US Supreme Court decisions in undertaking the review and repeal of regulations directed under the DOGE EO. The DOGE EO directs the 'heads of all executive departments and agencies' to identify certain categories of 'unlawful and potentially unlawful' regulations within 60 days of the date of the order and begin plans to repeal those regulations. The PM notes that in undertaking this process, agency heads are instructed to prioritize evaluating each existing regulation's 'lawfulness' under the following US Supreme Court decisions: Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024). West Virginia v. Environmental Protection Agency (EPA), 597 U.S. 697 (2022). SEC v. Jarkesy, 603 U.S. 109 (2024). Michigan v. EPA, 576 U.S. 743 (2015). Sackett v. EPA, 598 U.S. 651 (2023). Ohio v. EPA, 603 U.S. 279 (2024). Cedar Point Nursery v. Hassid, 594 U.S. 139 (2021). Students for Fair Admissions, Inc. v. President & Fellows of Harvard College, 600 U.S. 181 (2023). Carson v. Makin, 596 U.S. 767 (2022). Roman Catholic Diocese of Brooklyn v. Cuomo, 592 U.S. 14 (2020). The White House also released a fact sheet with further explanation regarding the cited cases. The PM asserts that 'notice-and-comment proceedings are 'unnecessary' where repeal is required as a matter of law to ensure consistency with a ruling of the United States Supreme Court,' and that '[a]gencies thus have ample cause and the legal authority to immediately repeal unlawful regulations.' Notably, the PM specifies that, in effectuating repeal of 'facially unlawful' regulations, agency heads are directed to finalize rules without notice and comment, where doing so is consistent with the good cause exception under the APA. The PM asserts that this exception allows agencies to dispense with notice-and-comment rulemaking when that process would be 'impracticable, unnecessary, or contrary to the public interest.' The PM further asserts that 'notice-and-comment proceedings are 'unnecessary' where repeal is required as a matter of law to ensure consistency with a ruling of the United States Supreme Court,' and that '[a]gencies thus have ample cause and the legal authority to immediately repeal unlawful regulations.' The PM directs that: Immediately following the 60-day review period for identifying unlawful and potentially unlawful regulations under the DOGE EO, agencies take steps to effectuate the repeal of any regulation, or the portion of any regulation, that 'clearly exceeds the agency's statutory authority or is otherwise unlawful.' The repeal of each unlawful regulation is to be accompanied by a brief statement of the reasons that the APA's good cause exception applies to permit the agency to dispense with applicable notice-and-comment requirements. Within 30 days of the conclusion of the review period, agencies submit to OIRA a one-page summary of each regulation that was initially identified as falling within one of the categories specified in the DOGE EO but which has not been targeted for repeal, explaining the basis for the decision not to repeal that regulation. Practical Implications and Further Action Trump's EOs and PM raise questions about the administration's authority over independent agencies created by Congress and will likely be challenged in court on constitutional grounds. In the meantime, they are sure to have a chilling effect on the federal agency rulemaking and enforcement process, at least in the intermediate term. These orders can also be expected to significantly impact, and have already begun to impact, the activities of most major federal regulatory agencies, including: The Commodity Futures Trading Commission (CFTC). The Consumer Financial Protection Bureau (CFPB). The Consumer Product Safety Commission. The Department of Commerce. The EPA. The FCC. The FTC. The Food and Drug Administration. The SEC. Federal prudential bank regulators including: the Federal Reserve Board; the Federal Deposit Insurance Corporation (FDIC); and the Office of the Comptroller of the Currency (OCC). The Trump orders are already making a notable impact on banking and crypto and digital asset regulation (for more information, see 2025 Trump Administration Transition Toolkit: The First 100 Days on Practical Law and SEC Regulation of Crypto and Digital Assets Under Trump 2.0 in the June 2025 issue of Practical Law The Journal). Trump's EOs and PM raise questions about the administration's authority over independent agencies created by Congress and will likely be challenged in court on constitutional grounds. In the meantime, they are sure to have a chilling effect on the federal agency rulemaking and enforcement process, at least in the intermediate term. Recent regulatory actions in response to the Trump deregulation orders and the PM include: Banking deregulatory activity. US prudential bank regulators, including the FDIC, the Federal Reserve Board, and the OCC, have undertaken or been directed to engage in significant deregulatory efforts. (For more information, see Trump Administration Toolkit on Practical Law.) OMB notice of request for information (RFI). On April 11, 2025, OMB issued an RFI soliciting 'ideas for deregulation from across the country.' OMB seeks comment from the public on regulations that are 'unnecessary, unlawful, unduly burdensome, or unsound.' Comments should address the background of the rule and the reasons for the proposed rescission, with particular attention to regulations that are inconsistent with statutory text or the Constitution, where costs exceed benefits, where the regulation is outdated or unnecessary, or where regulation is burdening US businesses in unforeseen ways. Department of the Treasury (Treasury) repeal release. On April 15, 2025, the Treasury issued a 'direct' final rule entitled Eliminating Unnecessary Regulations, in which the Treasury states that it is conducting a review of existing regulations with the goal of reducing regulatory burden by revoking or revising existing regulations that meet the criteria set out in the DOGE EO and the PM. The rule states that, 'In support of that objective, this direct final rule streamlines titles 12 and 31 of the Code of Federal Regulations (CFR)' by removing regulations and portions of regulations that are 'no longer necessary, or have no current or future applicability and, therefore, no longer provide useful guidance.' The regulations or portions of regulations removed are: Federal Financing Bank Bills, 12 CFR Part 810; Book-Entry Procedure for Federal Financing Bank Securities, 12 CFR Part 811; TARP Standards for Compensation and Corporate Governance, 31 CFR Part 30; TARP Conflicts of Interest, 31 CFR 31.211 through 216; and Civil Penalty, 31 CFR 1010.820. CFTC actions. An April 8, 2025 keynote address by Acting CFTC Chair Caroline Pham noted the following actions that she has taken in furtherance of the Trump orders: realignment of the CFTC Division of Enforcement task forces to 'end regulation by enforcement and refocus on fighting fraud and helping victims'; issuance of an advisory on the CFTC's new policy regarding self-reporting, cooperation, and remediation and another advisory related to DOE referrals; and launch of an initiative aimed at expeditiously resolving a backlog of noncompliance matters that do not involve customer harm or market abuse. House Committee on Financial Services (HFSC) Letters On April 1, 2025, HFSC Chair French Hill and committee members issued a release on a series of letters sent to agencies requesting the rescission, modification, or re-proposal of specific Biden-Harris administration actions that 'reduce competition and innovation and must be rescinded or significantly modified.' According to the release, 'These rules and guidance lacked proper cost-benefit analysis, would have significant negative economic consequences, and frequently ran afoul of statutorily-mandated procedures intended to ensure well-formulated rulemaking.' The committee sent the following letters on specific rules: Interagency letter to Acting FDIC Chair Travis Hill, Acting Comptroller of the Currency Rodney Hood, and Federal Reserve Board Chair Jerome Powell. Letter to Acting FDIC Chair Hill. Letter to Acting Comptroller of the Currency Hood. Letter to Federal Reserve Board Chair Powell. Letter to Acting CFPB Director Russell Vought. Letter to Treasury Secretary Scott Bessent in his capacity as Financial Stability Oversight Council chair on subjecting nonbank financial companies to prudential supervision by the Federal Reserve Board through updates to the Analytic Framework and Nonbank Designation Guidance. Digital Assets and Financial Technology HFSC Chair Hill and Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence Chair Bryan Steil and subcommittee members sent letters urging the federal banking agencies and the CFPB to withdraw several regulatory actions that they assert have restricted financial institutions' engagement in digital assets and hindered the growth of fintech companies: Interagency letter to Acting FDIC Chair Hill, Acting Comptroller of the Currency Hood, and Federal Reserve Board Chair Powell. Letter to Acting CFPB Director Vought. SEC Rules On March 31, 2025, the HFSC sent a letter to then-Acting SEC Chair Mark Uyeda, stating that the SEC had recently lost sight of its mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation. The committee encouraged the SEC to withdraw the following final and proposed rules: These SEC rules appear to be candidates for review and potential rescission under the DOGE EO.
E&E News
13 hours ago
- Business
- E&E News
Agencies roll out plans to pare down NEPA reviews
The Trump administration advanced its deregulatory drive Monday as government agencies announced plans to renege on the country's linchpin environmental law. At issue is the National Environmental Policy Act, designed to require the federal government to consider environmental impacts for permit applications and management of public lands. The 1970 law has been under threat since President Donald Trump's return as he has rallied to build pipelines, ports and other energy infrastructure to boost domestic production of fossil fuels without environmental reviews. The Department of Energy issued an interim final rule that rescinded all of its NEPA regulations while releasing guidance or 'implementing procedures' in their place. Advertisement Energy Secretary Chris Wright said Trump promised to speed up the permitting process for massive infrastructure projects.
Yahoo
a day ago
- Politics
- Yahoo
US environment agency employees say Trump administration undermining mission
By Valerie Volcovici WASHINGTON (Reuters) -Nearly 300 current and recently terminated employees of the U.S. Environmental Protection Agency published a declaration of dissent on Monday, outlining five major concerns about how the Trump administration's politicization of science and severe job cuts were undermining the agency's mission. The declaration to Administrator Lee Zeldin was sent as another expected round of staff reductions looms and as the agency undergoes a major reorganization, including the dissolution of its office of research and cancelling of billions of dollars in grants. The reorganization will consolidate several key offices, reflecting plans to cut regulatory red tape and promote more fossil fuel energy development, as laid out in President Donald Trump's executive orders. "Today, we stand together in dissent against the current administration's focus on harmful deregulation, mischaracterization of previous EPA actions, and disregard for scientific expertise," said the 278 EPA employees who wrote and signed the letter in their personal capacities, including 174 who signed their full names. The declaration is similar to one sent earlier this month by employees of the National Institutes of Health to its director to protest the politicization of research and disruption of scientific progress. The EPA employees said their five main concerns are the partisan rhetoric and misinformation shared in EPA communications; disregard for the agency's own scientific assessments; abandoning environmental justice while slashing funding; dismantling the research office; and creating a culture of fear. "Your decisions and actions will reverberate for generations to come," they said. "EPA under your leadership will not protect communities from hazardous chemicals and unsafe drinking water, but instead will increase risks to public health and safety."
