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Monday, December 09, 2019

Republicans Take First Steps To Kill Five Obama-Era Regulations

WASHINGTON (Reuters) – House Republicans on Monday began the process of killing five Obama-era rules on corruption, the environment, labor, and guns under the first real test of the Congressional Review Act, a law intended to keep regulation in check.

Republicans put as much urgency on limiting what they consider over-regulation that stifles economic growth as they do on overhauling the tax code and dismantling the Affordable Care Act, according to House Majority Leader Kevin McCarthy.

This is the first time the Republican-led House of Representatives has targeted specific rules since convening on Jan. 3. Earlier this month it passed bills to limit regulatory agencies and Republican President Donald Trump is cutting regulation through executive orders.

Under the law, Congress can use simple majority votes to stop recent regulations in their tracks. Timing in the law means any rules enacted after May 31 are eligible for axing.

The law has been used effectively only once, ending a rule on ergonomics in 2001. Both sides consider this week a test of its powers.

The House Rules Committee was expected on Monday evening to send to the full chamber a measure axing three regulations enacted under former President Barack Obama, a Democrat. They were the Stream Protection Rule, the Securities and Exchange Commission’s “resource extraction rule,” and the Social Security Administration’s expanded background checks on disabled gun buyers.

On Tuesday it will send another measure overturning rules on methane and federal contractors. The full body is expected to pass both measures on Wednesday and then hand them off to the Senate.

Senate Majority Leader Mitch McConnell on Monday introduced a companion measure on the stream rule so the Senate can act quickly once the House votes.

Senator James Inhofe, chair of the Environment committee, meanwhile, said he was introducing one on the extraction resources and warned that there were other resolutions to come.

The Interior Department took years to craft the stream rule, hoping to prevent coal-mining waste from contaminating water sources in areas near mountain-top removal mining sites. Critics say it is unnecessary and goes too far, wiping out jobs, and usurping state rights.

The extraction rule took years to complete. It was required in the 2010 Dodd-Frank Wall Street reform law, but only approved this summer. It requires companies such as Exxon Mobil Corp to state publicly how much they pay governments in taxes and other fees. Opponents say it hurts U.S. energy companies, while human rights groups argue it reduces corruption.

Liberal groups are outraged by the rollbacks, but their traditional allies, Democratic lawmakers, have limited means to stop them in the Republican-dominated Congress.

House Democrats will host events with experts, and activists will try to rally the public, hoping to persuade Republicans to vote no. Senate Democrats cannot filibuster the measures but congressional aides expect them to slow the process by taking the full five hours they are allowed to speak against each measure on the chamber’s floor.

(Reporting by Lisa Lambert; additional reporting by Sarah N. Lynch; Editing by Cynthia Osterman and Grant McCool)

IMAGE: U.S. President Donald Trump (R), flanked by U.S. Representative Steve Scalise (R-LA) (from L), Representative Kevin McCarthy (R-CA), Senator John Cornyn (R-TX), and Senate Majority Leader Mitch McConnell (R-KY), receives a standing ovation as he speaks at a congressional Republican retreat in Philadelphia, U.S. January 26, 2017. REUTERS/Jonathan Ernst

Justice Department: Trump Son-In-Law Kushner Can Serve As White House Adviser

WASHINGTON (Reuters) – President Donald Trump can hire his son-in-law, Jared Kushner, as a senior White House adviser without breaking federal anti-nepotism laws, the U.S. Department of Justice said.

In a letter dated Jan. 20 posted on its website, the department’s Office of Legal Counsel said the president has special hiring authority that exempts White House positions from laws barring the president from naming a relative to lead a federal agency.

The New York Times first reported the decision, saying it was posted to the department’s site on Saturday.

Questions about Kushner’s role emerged as voters and lawmakers questioned potential conflicts of interest for Trump, given his wide-ranging business interests, history of employing family members, and the influence of his daughter Ivanka Trump, who is married to Kushner.

The office of White House counsel had asked the Justice Department for a definitive opinion on Kushner’s role.

The Justice Department said that if Trump chooses to officially hire Kushner and give him security clearance usually granted for White House staff, then conflict-of-interest laws would apply and Kushner would have to abide by their restrictions.

“Congress has not blocked, and most likely could not block, the president from seeking advice from family members in their personal capacities,” the department wrote in its 14-page opinion.

“Consequently, even if the anti-nepotism statute prevented the president from employing relatives in the White House as advisors, he would remain free to consult those relatives as private citizens,” it said.

(Reporting by Lisa Lambert; Editing by Kevin Drawbaugh and Leslie Adler)

IMAGE: Ivanka Trump dances with her husband Jared Kushner at  U.S. President Donald Trump’s “Liberty” Inaugural Ball in Washington, DC January 20, 2016. REUTERS/Brian Snyder

U.S. Consumer Financial Agency Could Be Defanged Under Trump

WASHINGTON (Reuters) – The U.S. Consumer Financial Protection Bureau, already in legal limbo after an October court decision, could find its powers scaled back by President-elect Donald Trump and a Republican-led Congress, according to members of both political parties, lobbyists and lawyers.

That may mean the end of many of the agency’s rule-making actions that have enraged critics, including a proposal to stop companies from blocking customers from class action lawsuits and another one to limit payday lending.

Creation of the CFPB was authorized in the 2010 Dodd-Frank Wall Street reform law enacted in the aftermath of the 2007-09 financial crisis. The agency began operations in 2011.

An agency to protect consumers’ finances was the idea of liberal Democratic Senator Elizabeth Warren of Massachusetts. Its creation is considered one of Democratic President Barack Obama’s top domestic policy achievements.

A Trump administration is expected to be hostile to the agency as it is currently formulated.

“The election spells very bad news for the CFPB,” said Alan Kaplinsky, head of the Consumer Financial Services Group at law firm Ballard Spahr.

Many Republicans opposed the agency’s creation. They now say they dislike its structure and believe it oversteps its authority in enforcement.

“It’s a very fragile thing. It was birthed in controversy and is under constant attack,” said consumer attorney Deepak Gupta, who worked at the CFPB in its early days. “It may not survive the way we know it through this administration.”

A single director leads both rule-making and enforcement, and can be dismissed only for cause. Furthermore, the agency is funded by the U.S. Federal Reserve system, which means it is not dependent on the typical congressional appropriations process.

The Republican-led House of Representatives Financial Services Committee in September passed legislation without any Democratic votes that would change the name and structure of the agency and would create a five-member commission to govern it.

Republicans also have pushed for the agency to receive funds from Congress to make it accountable to elected leaders.

Both of those proposals would greatly weaken the power of Richard Cordray, the agency’s original and current director.

Obama has blocked these Republican efforts with veto threats.

Trump, though he has not directly addressed the CFPB, has said he wants to roll back parts of Dodd-Frank. Trump could, if he wanted to, fire Cordray on the first day of his presidency, especially following an October ruling by a three-judge federal appeals court panel that found the agency’s structure unconstitutional and that the president should be able to dismiss the director at will.

That ruling was put on hold while the CFPB decides whether to petition the entire U.S. Court of Appeals for the District of Columbia Circuit for a review or appeal the ruling to the U.S. Supreme Court. The agency has until Nov. 25 to decide. Trump’s administration could withdraw any appeal, letting the decision stand.

Cordray, appointed in 2013, is halfway through his five-year term.

Few in the banking industry think the entire agency will be eliminated. Democrats who support the agency will have a large presence in the Senate. Warren, who was Obama’s first choice to head the agency, has promised that Democrats will fight efforts to defang it.

Even some bankers want to see it stay. Richard Hunt, president of the Consumer Bankers Association, said his group would fight to maintain the CFPB in some form because it consolidates consumer banking rules under one regulator.

A DIFFERENT DIRECTOR

Trump takes office on Jan. 20. Cordray could be replaced early in 2017, said Mark Calabria, an economist at the libertarian Cato Institute think tank. Trump’s transition team is already looking into Cordray replacements, he said.

The law allows for the president to terminate a director over inefficiency, malfeasance or neglect of duty, which leaves room for Trump to find cause regardless of what the appeals court decides, Calabria added.

Cordray has set precedent with enforcement cases that Calabria and other critics have called backdoor rule-making.

“Cordray has left the CFPB vulnerable to what his successor may want done because he didn’t hardwire rule-making,” Calabria said.

If Cordray quits or is removed, statute calls for his deputy to step into the job temporarily. Acting Deputy Director David Silberman, also a strong consumer advocate, would likely continue to carry out the current agenda, said Quyen Truong, a partner at Washington law firm Stroock & Stroock & Lavan. Truong was the assistant director and deputy general counsel for the CFPB until earlier this year.

The CFPB did not respond to requests for comment on Cordray’s possible departure or the fate of current rule-making actions.

(Additional reporting by Emily Stephenson; Editing by Linda Stern and Will Dunham)

IMAGE: Consumer Financial Protection Bureau (CFPB) Director Richard Cordray answers questions at the Reuters Washington Summit in Washington, DC, U.S. October 23, 2013. REUTERS/Jonathan Ernst/File Photo