GAO: Bank Leveraged Lending Guidance A Rule, Not Guidance

As we promised in our April 2017 Client Alert ( Bank Leveraged Lending: Guideline or Rule?), we have been following the request made by Sen. Patrick Toomey, R-Pa., to the Government Accountability Office to determine if the Interagency Guidance on Leveraged Lending (Guidance) issued in 2013 by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation was a guidance (as it was titled) or a rule (as others suggested). As a guidance, its authors viewed it as exempt from the requirements of the Congressional Review Act (CRA). As a rule, it would be subject to the CRA, and therefore subject to review and possible rejection by Congress.

The GAO issued its findings on October 19, and determined that the Guidance is not a guidance after all, but, in fact, is a rule and therefore subject to the CRA.

This finding by the GAO will start the process of congressional scrutiny under the CRA, which contains requirements for submission of the rule by the agencies to Congress, along with certain other information. Congress will have 60 days after the rule is submitted to disapprove it by a...