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WSJ: Toomey’s ‘Guidance’ Repeal Guide

Today the editorial board of The Wall Street Journal touted “a new opportunity to scrub the regulatory ledgers” with the Congressional Review Act.

[Republicans] might be able to do more now that a government agency has confirmed that Congress can also use the law to repeal diktats the Obama Administration slipped in under the regulatory radar.

One example is the 2013 “guidance” that federal financial regulators issued on leveraged lending. This was another example of Obama officials ducking formal rule-making by claiming they were merely issuing “voluntary” suggestions. The banking industry knew better and chose to cut back on leveraged loans, denying a vital source of capital for indebted companies that lack access to public capital markets, and pushing such activity to nonbank lenders that are even less regulated and make riskier bets.

In light of this migration and uncertainty, Pennsylvania Senator Pat Toomey recently asked the Government Accountability Office to judge whether the guidance counts as a “rule” under the Congressional Review Act. The GAO has now confirmed that it does.

You can read the full editorial at The Wall Street Journal.

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