On Oct. 9, 2019, President Trump issued two executive orders intended to limit the way federal agencies issue and utilize guidance in their supervisory capacity. There are plenty of critics of the way federal agencies have used agency-issued guidance as a purported means around public notice and comment to set expectations and hold persons and entities accountable. Guidance issued by federal agencies may include a disclaimer stating that the guidance is non-binding, but according to the Trump administration, it carries the implicit threat of enforcement if the guidance is not complied with. One of the executive orders requires agencies to treat guidance documents as non-binding, take public input into account when formulating guidance documents and make guidance documents readily available to the public. The second executive order prohibits federal agencies from treating noncompliance with guidance the same as noncompliance with a statute or regulation. The order states “When an agency takes an administrative enforcement action, engages in adjudication, or otherwise makes a determination that has legal consequence for a person, it must establish a violation of law by applying statutes or regulations. The agency may not treat noncompliance with a standard of conduct announced solely in a guidance document as itself a violation of applicable statutes or regulations.”  

Author

John Zasada, JD, CAMS – Compliance Consulting Director, Financial Institutions Group. John can be reached at zasada@doeren.com.