Big Changes Announced for Independent Regulatory Agency Actions

Washington, D.C. (February 19, 2025) - On February 18, 2025, President Trump signed an executive order (February 18 EO) that fundamentally changes the scope of Executive Branch oversight of “independent regulatory agencies” and commissions that regulate securities, labor, financial services, transportation, energy, and consumer protection.

These agencies, often led by multi-member commissions, have traditionally had significant independence from the authority the President exercises over Executive Branch departments and agencies. These agencies generally had independent litigating authority from the Department of Justice, their budgets were not subject to Office of Management & Budget (OMB) amendment or apportionment, their regulations were not subject to review by OMB, and their commissioners or directors were statutorily limited to firing only “for cause.”

The February 18 EO requires these newly added agencies to submit all proposed and final regulations to the Office of Information and Regulatory Affairs (OIRA) for review prior to publication in the Federal Register. Those submissions begin within 60 days or upon publication of new implementing guidance, whichever is sooner. This also subjects these agencies' rulemakings to cost-benefit analysis guidance issued by OMB.

As a result of E.O. 14192 (Unleashing Prosperity through Deregulation) issued on January 31, 2025, these agencies will also be subject to “regulatory budgets,” which will require their net regulatory costs to be less than zero. It will also require them to issue ten deregulatory actions for every new significant regulatory action that imposes costs. No new rule may be issued without first being published in the Unified Regulatory Agenda or without a waiver from the OMB Director.

For the first time ever, these far-reaching requirements will place the independent agencies under the direct authority of the White House and obligate the agencies to comply with major new regulatory obligations. The affected agencies include regulators of financial services (Securities & Exchange Commission, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, Consumer Financial Protection Bureau, Federal Housing Finance Agency, Commodity Futures Trading Commission, and the Federal Reserve[excluding monetary policy]); consumer protection (Federal Trade Commission, Consumer Products Safety Commission); labor (National Labor Relations Board, Occupational Safety and Health Review Commission, Mine Safety and Health Review Commission); energy (Federal Energy Regulatory Commission, Nuclear Regulatory Commission); transportation (Surface Transportation Board, Federal Maritime Commission); and other domain-specific regulators (Federal Communications Commission, Postal Regulatory Commission, and Federal Election Commission).

There is no question that the February 18 EO is headed to the courts, but businesses regulated or affected by any of these agencies should take note of this radically changed regulatory landscape and its implications for their operations.

Lewis Brisbois’s Administrative Law & Regulatory Practice attorneys are closely monitoring these developments and advising clients on the risk and opportunities these changes present.

Authors:

Thomas A. Brooks, Partner

Paul Kisslinger, Partner

Jane C. Luxton, Managing Partner - Washington, D.C. and Co-Chair of Administrative Law & Regulatory Practice

Rosario Palmieri, Partner and Co-Chair of Administrative Law & Regulatory Practice

Malcolm Savage, Associate