EO 14219 and the Prudential Regulators

It seems like the broad regulatory review ordered by EO 14219 was drowned out by last month’s other noise. And, at most agencies, staffing upheaval will make it hard to take rapid deregulatory action. But for the prudential banking regulators, the situation might be different.

➡️ Broad Regulatory Review

The EO calls for a government-wide review of regulations AND guidance for modification or rescission under seven legal or policy grounds. Four of the seven implicate conservative legal theories on federalism, delegation, and statutory interpretation. The other three implicate the Administration's broader regulatory and economic policy priorities.

Agency heads (and their "DOGE Team Leads") are supposed to identify regulations in each of the seven categories by April 20. OIRA will then work with them on identifying deregulatory actions to go into the Unified Agenda.

➡️ Deregulation Requires Staff

While the review may proceed as planned, progress on actual deregulatory actions will be hampered by all the personnel terminations and upheaval.

Some employees who would have done the work have been fired, and more may depart voluntarily. These employees are highly specialized and difficult to replace – whether with other humans or AI.

To the extent understaffed agencies cut corners, it will hurt them in court when deregulatory actions are challenged. The quality of the "reasoned analysis" in the rulemaking record is a major focus of judicial review.

And where the deregulatory action is based on a new statutory interpretation, the courts will no longer defer to the agency's interpretation, now that Chevron is history.

➡️ Impact of EGRPRA

What's true for most agencies, though, might be less true for the prudential banking regulators.

The decennial review of ALL banking regulations mandated by EGRPRA is already underway. The statutory timelines all but ensure that the review will be completed during the current presidential term.

EGRPRA explicitly instructs the agencies to "eliminate unnecessary regulations to the extent that such action is appropriate." This could put them in a stronger position to defend deregulatory actions in court.

Practically speaking, I wonder how much impact the EGRPRA process has on the agencies' ability to deregulate expeditiously.