Former Congressman Mick Mulvaney is now a bureaucrat — so he proclaimed at a Congressional hearing on April 18. The acting director of the Consumer Financial Protection Bureau told the House Committee on Appropriations, “I’m a member of the bureaucracy, I’m a member of the executive branch of the government – I’m a bureaucrat.” It’s extraordinary, then, that this bureaucrat promptly called for more Congressional restraint on his powers. Congress should listen.
Mulvaney honed in on the Congressional Review Act, which passed the Senate 100-0 in 1996, that allows Congress to invalidate rules and guidance documents promulgated by regulatory agencies. If an agency rule is invalided by Congress, the law further forbids the agency from double dipping with any similar rules or guidance on the same subject. For a while, this useful tool was neglected, used only once from 1996 to 2017. But it’s since been used 15 times by Congress to invalidate rules from the Obama administration.
Most recently, the Senate invalidated an Obama-era CFPB rule hamstringing auto loans. Ostensibly aimed at punishing auto lenders for discriminatory outcomes, the rule was based on extremely dubious evidence and did more harm than good to consumers, including minority consumers. Another major problem with the rule was the CFPB had tried to pass it off as an informal “guidance document,” presumably to circumvent the formal, less expedient rulemaking requirements of the Administrative Procedure Act.
Such “regulatory dark matter” makes it hard for the American people and even lawmakers to oversee what regulators are doing to people’s lives and livelihoods. But a big part of the blame goes to Congress. As Mulvaney astutely observed, many rules are based on ambiguous laws passed by Congress:
“If you leave stuff ambiguous, then I get to interpret it. And you might like the way I interpret it or you might not like the way I interpret it, and it would change based upon who is sitting in my particular chair.”
Unreliable rules that blow with the political wind are bad enough, but at least they are harder to change than bureaucratic dark matter like guidance documents or “administrative interpretations.” For example, one major change to Department of Labor rules was announced via blog post during the Obama administration. It was subsequently rescinded by a three-line statement on the Department’s web site in the new administration.
What can Congress do to shorten the leash on regulators?
In the short run, Congress can use the CRA to provide the “clarity” to agencies that Mulvaney called for. By invalidating more rules that exceed what Congress intended, our elected representatives can bring agencies back in line — and provide clearer guidance to courts as well. It can start by passing a CRA resolution to invalidate the Bureau’s small dollar lending rule, which will hurt consumers who need small, short term loans by making it nearly impossible for them to get one.
In the long run, Congress should do more to take responsibility for its powers. This is a rare moment in time when a member of the Executive Branch calls for reducing his rulemaking powers. Congress should not waste the opportunity to listen and fix the problems it created.