WASHINGTON — Republicans in Congress are making prolific use of a
It's an accelerating trend, and not specific to bank regulation. But in the last few weeks, it's become particularly noticeable in that arena.
"I hadn't really paid attention to it before three or four years ago at all," said Joseph Silvia, a partner in financial institutions law at Dickinson Wright and a banking law professor at Chicago-Kent College of Law. "Now it's something that's being used because people figured out that they can get some of these things through and change the policies that we don't like."
House Republicans last week introduced and advanced
Overall — not just including banking policy — the current Congress has launched more CRA resolutions than any other. The attempts to nullify agency rulemakings don't just overturn one rule; they also prevent regulators from making a substantially similar one, which is a significant curtailment of policymakers' abilities.
The current Congress has already introduced well over 80 resolutions. By comparison, the next most active CRA period, during the 115th Congress, from 2017 to 2019, introduced just 77 resolutions, said Sarah Hay, a policy analyst at the George Washington Regulatory Studies Center, which tracks CRA motions.
At play, Hay said, is the CRA "lookback window." That's the last 60 working days of a congressional session, the timing of which is always unclear until it's over but which should start in May or June of this year for the current Congress. If a new party comes to power in the next Congress, they would be able to nullify any laws passed during the lookback window this summer.
The CRA always sparks this regulatory rush before elections, where potential changes in administration mean that the previous administration's rules are most vulnerable.
In this case, Congress is experiencing the first real thrust of challenges, as Republican lawmakers look to criticize and fight back against all the rules that President Joe Biden's regulators are trying to get across the finish line before they're most likely to be nullified.
"If former President Trump were to win this fall and if Republicans control Congress, then any regulations that are issued by the Biden administration during the lookback period are subjected to CRA review," Hay said. " And so all of that to say, there's a huge caveat that's hinging on who will win the election. Because if Biden wins reelection, people are going to be paying less attention to the CRA because he won't want to approve a resolution disapproving regulations issued by his own administration. So that's why everyone's talking about it this year."
On their face, the resolutions introduced to date aren't likely to result in actual policy. While some of the efforts could find limited bipartisan support, President Joe Biden is almost certain to veto any that find their way to his desk, as he did with the challenge to the CFPB small-business data collection rule.
"House Republicans have made clear whose side they are on: special interests including big banks that want to keep charging consumers high fees and rollback bank regulations that protect against risks to the financial system and our economy," a White House spokesperson told American Banker in a statement.
That said, the resolutions still serve as important messaging and political tools, experts said, and bank policy watchers shouldn't expect them to slow down as the 2024 elections approach.
Perhaps most directly, the CRA resolutions make it easier for Republicans to communicate where a future Republican administration would want to focus its energy.
It also forces Democratic lawmakers, particularly those in vulnerable seats in the 2024 election season, into potentially politically unpopular votes.
"The senators especially in tough elections, it forces them to take the vote, and it could be a difficult vote," said Aaron Cutler, a financial services lobbyist at Hogan Lovells. "So for instance, like Sherrod Brown in Ohio, his constituents are going to see that he's now taking a vote for SEC climate disclosures. Now he could be seen as advocating for that."
While Brown's position as chairman of the Senate Banking Committee means he's often seen as aligning with the Biden administration on banking policy anyway, other lawmakers might need to be more careful, and occasionally cross over party lines, on more controversial issues. Sen. Jon Tester, D-Mont., a Senate Banking Committee member who is one of the most vulnerable Democratic senators in 2024, is a good example of this, Cutler said.
"For the next couple of months, Sen. [Chuck] Schumer is going to want to shield his members from tough votes," Cutler said. "So this is the last thing that Democrats want to be dealing with, because those sorts of votes could help Republicans win."
"A lot of this is about what happens in November," he added.
Ultimately, part of the goal is to force lawmakers, particularly those in vulnerable seats, to take positions on issues like climate change or crypto regulation that could isolate some demographics of voters, Silvia said. In the worst case scenario for Democrats, he said, Republican lawmakers get to go home to their voters and say that their resolution got bipartisan support.
"In an election year like this, this assumed election with Biden and Trump, do people really want to focus their political capital on banking issues?" he said." Or do they want to focus on much broader economic policies and tax policies?"
