GAO Determines Interagency Leveraged Lending Guidance Is a Rule, Subject to CRA Review

October 23, 2017

On October 19, 2017, the U.S. Government Accountability Office issued a relatively rare legal determination concluding that the federal banking agencies’ 2013 “Interagency Guidance on Leveraged Lending” is a rule subject to the Congressional Review Act.

The GAO’s conclusion that the Interagency Guidance is a rule subject to the CRA potentially could open the door for Congress, with the President’s approval, to disapprove and invalidate the Interagency Guidance.

The GAO’s finding that the Interagency Guidance is a “rule” subject to the CRA could have much broader consequences given the significantly greater use of the CRA to challenge agency rules during the early months of the Trump Administration. Most importantly, since the agencies have not previously considered supervisory guidance to be subject to the CRA, they have rarely submitted such guidance for Congressional review. Given the GAO’s broad reading of the applicability of the CRA, the ruling could greatly expand the scope of supervisory guidance that could be challenged.