12 Regulatory Actions You Need to Watch
Most of us know that Congress won’t pass much meaningful legislation between now and election day. But regulatory action in the agencies is a very different story.
Outgoing presidents like to initiate regulations – sometimes tens of thousands of pages – as a way to further their agenda. These include last-minute “midnight regulations,” offered between the November election and the inauguration, which can give their successor a headache. One study showed that the federal register swells an average of 17 percent during this time. As The New York Times once put it, “Adams did it to Jefferson. Teddy Roosevelt did it to Taft. Carter did it to Reagan. Bush I did it to Clinton. And Clinton really did it to Bush II.”
Obama will do it, too. That means advocacy professionals may need to track dozens of regulatory actions before an equal number of agencies, and stand ready to offer comments in support or opposition.
So, what should you be watching? That depends on your organization’s interests. But here are some of the top regulatory actions in major sectors, as identified by CQ reporters.
ENERGY AND ENVIRONMENT
Oil and Gas Methane and Toxic Emissions
The EPA is requiring oil and gas companies to install equipment to detect and stop leaks at new drilling and processing sites, and conduct more frequent inspections. Drillers will also be required to capture methane — a component of natural gas — at new wells, including those where hydraulic fracturing is used. The rule, the first to directly limit methane emissions in the oil and gas sector, will go into effect within 60 days. Legal challenges from industry groups will likely follow, as they have for other Obama administration energy and climate policies.
Drinking Water Safety
The EPA will accelerate its work to revise rules governing lead and copper pipes in public water systems. “It clearly needs to be strengthened,” EPA Administrator Gina McCarthy said in recent congressional testimony. Even before Flint, the agency had been working for about six years to rewrite the Lead and Copper Rule, which has been criticized by environmental groups for being too weak, and by the operators of private and public water systems for being too complex. Even at an accelerated pace, the revision is not expected until 2017.
Offshore Air Quality Rules
Comments are due on June 20 on the Bureau of Ocean Energy Management (BOEM) rule to require operators to monitor and track all major air pollutants under the Clean Air Act. Current BOEM regulations require companies to track and report emissions of carbon monoxide, sulfur dioxide, nitrous oxides, total suspended particulates and volatile organic compounds.
Clean Power Plan
Although blocked by federal courts, the EPA is still rolling out some details of its proposed Clean Power Plan that are raising Republican ire. The latest example is the EPA’s decision to propose the Clean Energy Incentive Program, which would give “emission reduction credits” to states that adopt renewable technology investments early in the process of complying with the blocked Clean Power Plan, as well as continuing efforts to write “Model Trading Rules,” which would act as guidance for states in complying with the plan.
Medicare Payments for Drugs and the ‘Doc Fix’
The Obama administration is fighting to save its controversial proposal to change and potentially curb Medicare payments for drugs that doctors provide in their offices, such as chemotherapy. Republicans, and even some Democrats oppose the regulation because of concerns from drug makers, doctors and consumer groups. Lawmakers are also watching another major rule that would implement the “doc fix” law that Congress passed last year, which replaced an often-criticized physician payment formula with a new system.
FCC Privacy Rule
The FCC has given a tight window for commenting on its proposed broadband privacy rule, which would require internet service providers to allow customers to opt out of having their personal information shared. The FTC had been the primary agency here, so opponents see this as the FCC barging into an area in which it is not familiar.
Cyber Attack Reporting
This is not a formal rule, but the administration has created an Information Sharing and Analysis Centers task force to develop standards for ISAOs, which the administration hopes will be created within industries to share information about cyber threats and actual attacks. The consortium recruited volunteer cyber security experts who formed six working groups to create the guidelines, which address privacy and security issues raised by information sharing, as well as support, capabilities, governance, the technical means for sharing information, and the role of government. Comments are due on the guidelines June 17.
DAPA and DACA
The Deferred Action for Parents of Americans (DAPA) and expansion of Deferred Action for Childhood Arrivals (DACA) are both stalled until the Supreme Court rules. But if the court declares them legal, implementation may come quickly, and perhaps rule-makings along with it.
Shell Corporation Owners
A Treasury rule on Shell Corporation Owners would require banks and other financial institutions to collect much more information about the owners of shell corporations. The effort gained new urgency after the release of the Panama Papers. It has been criticized for being too loose, requiring the identification of anyone who owns at least 25 percent of a company, because more “owners” could be recruited to dilute that percentage.
The Consumer Financial Protection Bureau proposes a rule that would prevent financial institutions from putting pre-dispute arbitration clauses that block consumers from joining class action lawsuits in new consumer contracts for bank accounts, credit cards and other financial products. Though the proposal doesn’t outright ban the use of these clauses, it does require companies to use specific language stating that consumers are allowed to be part of a class action in court. Bankers defend the arbitration process as being quicker and more effective.
Increasing the Net Stable Funding Ratio
The Federal Reserve has joined with the OCC and FDIC in proposing a rule to require the nation’s biggest banks to step up their liquid holdings to ensure mega firms have a stable source of funding to cover their activities for one year in a time of financial stress. The NSFR rule would require large banking organizations to maintain a “minimum level of stable funding relative to the liquidity of their assets, derivatives, and commitments, over a one-year period.” The net stable funding ratio is scheduled to go into effect on Jan. 1, 2018, with comments accepted through Aug. 5 of this year.
All six federal financial regulatory agencies – Federal Reserve, FDIC, OCC, NCUA, SEC and FHFA – have proposed identical rules to curtail incentive-based compensation packages for bank executives and employees who have the authority to make risky bets that could endanger a bank’s financial health. This was prompted by the need to implement action 956 of the Dodd-Frank Act. Comments will be accepted through July 22.
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