December 12, 2024 • 20 mins
The rarely used Congressional Review Act provides an opportunity for Congress and the president to overturn regulatory rulemakings — and the GOP trifecta in 2025 will bring new regulations up for review. On the latest episode of the ABA Banking Journal Podcast — sponsored by TransUnion — ABA experts Kirsten Sutton and Ginny O’Neill break down details about CRA that bankers need to know:
- Which rulemakings are subject to CRA disapproval resolutions — in financial services, principally Section 1033 and the newly finalized overdraft rule.
- How the GOP Congress might prioritize regulatory actions for CRA resolutions.
- The limitations on CRA and why, as Sutton says, “this is not a magic wand situation where Congress can just step in and CRA everything that we have a problem with.”
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Ginny O'Neill (00:00):
I think we all understand that the CRA is a tool
(00:03):
and it's a powerful tool, but it'sonly one of the tools we'll use.
We will continue to pursue the litigation.
We will work with the leadershipof the new agencies to work on
revising some of these rulesthat are outside the CRA window.
There's a lot of work to be done.
It's not all as fast as we would like.
Evan Sparks (00:26):
From the American Bankers Association, this is
the ABA Banking Journal podcast.
Welcome back.
Today's episode is presented by TransUnionand I'm delighted to have bring two of
my colleagues in our policy area togetherfor a conversation on a a big issue
that's going to be facing the industry andCongress in the very first months of 2025.
(00:47):
And that is the other CRA Reallykind of the other other CRA because
we have the Community ReinvestmentAct, we have the Consumer Reporting
Agencies, and then we also have theCongressional Review Act, which every
four to eight years comes up as anissue that we are going to talk about.
So and to, to talk about theCongressional Review Act with me, I
have my colleague, Kirsten Sutton.
(01:08):
Kirsten is Executive Vice Presidentfor Congressional Relations and
Legislative Affairs here at ABA.
And Ginny O'Neill.
Ginny is executive vicepresident for regulatory and
compliance policy here at ABA.
And and both of you can go reallydeep on this other, other CRA.
So thanks for being on the show.
Kirsten Sutton (01:27):
Thanks for having us excited to talk about it.
Evan Sparks (01:30):
All right.
So Kirsten, I'd love it if I could kindof take, give it to you first to explain
what this mechanism is, And, and the,the broad contours of how it works, why
the Congressional Review Act exists,and what it allows Congress to do.
Kirsten Sutton (01:44):
Yeah, so thank you.
And I'll, I'll give the disclaimer.
So I'm not a lawyer, thankfully Ginnyis, but as a long time congressional
Staffer had a number of experiencessort of interacting with the CRA.
And also when I was chief of staffat the CFPB, there were a couple of
bureau rulemakings that were CRA.
So Ginny and I are excitedto talk about those.
But the Congressional Review Act is atool that Congress has when it essentially
(02:08):
wants to invalidate a rulemakingthat has been finalized by an agency.
So it is considered under sort ofspecial circumstances that make it a
little bit easier to get it passed.
It has to be signed by the president inorder to go into an effect into effect.
But when Congress enacts a CongressionalReview Act, not only does it essentially
rescind and sort of invalidate thatagency's rulemaking, importantly, it
(02:32):
also says to the agency it cannot reissuea substantially similar rulemaking.
So it kind of ties the agency's hands.
Going forward that they can't justsay, okay, well, we're going to change
a couple things around the fringesand then just reissue a new rule.
They literally can't do anything similarto the rulemaking that was CRA'd.
Evan Sparks (02:50):
That's which, which makes sounds like, and the other key
thing, it's like Congress can acton a simple majority basis, right?
Kirsten Sutton (02:56):
This is a filibuster.
That was a really good point, Evan.
There are very few things that onlyneed a simple majority in the Senate.
It's reconciliation, it's nominations, andit's the Congressional Review Act vote.
So rather than having to hit that 60vote threshold, it makes it easier
for items to get through the Senate byonly requiring that simple majority.
Evan Sparks (03:17):
Ginny, I know there's a A window that Congress can use where
Congress can look, look back to kindof examine these rules and decide if
they're going to vote on a CRA resolution.
What, what is that window once thenew Congress comes in, starting
in, I guess, starting January 3rd?
Ginny O'Neill (03:36):
Okay.
Let me just say that there are, thereare two different CRA opportunities.
One is exists for everyrule that Congress writes.
So it is at the Congress, I mean,the regulator writes, the regulator
has to submit it to Congress.
And then Congress has 60 daysto decide whether to bring it
up for a vote to disapprove it.
(03:59):
But What you were talking about, Evan,is at the end of an administration when
when the regulators tend to write whatare known as quote unquote midnight rules.
And that's when they're trying to getall their work tied up at the end.
And that.
gives the congress has a the CRA hasa look back period and it allows the
(04:22):
them to reach back and consider forCRA resolution any rule that has been
finalized in the last 60 session days.
And so those are days where congressactually worked and those session days you
never know exactly until they Sign out.
But the session days extend.
(04:42):
It's not just five days a week.
It's only days Congress worked.
The best estimates right now thatwe have are that it probably extends
this look back period till July15th, somewhere around that time.
So any rule finalized since July15 Congress has the opportunity to
(05:03):
take a look at and decide whetherto issue a disapproval resolution.
Kirsten Sutton (05:07):
That's a really important point, though, because it's not like any
rulemaking that was done at any point.
Congress is just going to beable to pick up the ball and run.
There's a limited window based on whenthe rule was finalized and sort of
these congressional calendar days thatGinny mentioned, just sort of a runway.
And we saw when Trump becamepresident the first time.
(05:28):
This was really when this tool, atleast that I remember, Ginny, I'd be
curious if you have knowledge of kind ofhow regularly it was used going back a
little bit before my time in Congress.
But in kind of the last 20 years, youknow, Trump picked it up and ran with it.
And so we, we saw something that Icandidly hadn't really heard of as
a tool, even as a staffer before hebecame president, all of a sudden
(05:48):
it was like, everybody's talkingabout CRA and what can we see?
Ginny O'Neill (05:51):
And the reason for that is that even though this has been
around since 1996 and it was enactedis you have to have one party control.
You have to have the House, the Senateand the President all under the same
control so that you can actually getthe two parts of Congress and then
the President to sign it into law.
(06:11):
So that's why you soughtso much with Trump.
Evan Sparks (06:14):
And the only time you're going to get a president willing to sign
a resolution that's invalidating an activeadministrative or executive branch agency
is when you have is when you have thatcross party switch in the presidency.
Kirsten Sutton (06:29):
Right, I mean when Democrats had united control during,
The Dodd Frank Act, health care reform,you know, we weren't seeing CRAs
coming through, so it is a unique tool.
Ginny, I think, I think you've saidthe Trump administration did 16 in,
in the very beginning of the Congresswhen there was united Republican rule.
Last time I was on theHill when that happened.
Started, but over at the CFPBsort of when it was ending.
(06:53):
And I think really important to note,so we saw for those who who were
paying attention, the arbitrationrule of the CFPB and indirect auto
were, were both included in that list.
Ginny O'Neill (07:04):
And, and the point that's important there is in the
Congressional Review Act, though,the definition of a rule is broad, it
is not just what you think of as anAdministrative Procedure Act final rule.
It also includes things like guidance.
And that's where we saw it inTrump 1 when there was indirect
(07:27):
auto guidance issued by the CFPB.
Congress submitted it to the, aquestion to the GAO, is this a
rule under the Congressional ReviewAct, and the answer came back, yes.
And so then they were able todisapprove of that piece of guidance.
So,
Evan Sparks (07:44):
and my understanding on that, if I remember from writing
about it in ABA Daily Newsbytes wayback when, is that once the GAO made a
determination that this piece of guidancewas a rule, that restarted the clock
on the potential for a CRA resolution.
Ginny O'Neill (08:01):
It made the agency submit it to Congress like a rule.
And then that restarts the clock.
Start at the clock.
Evan Sparks (08:08):
All right.
Well, I mean, there are a lotof interesting dynamics here.
I think the question on the, on my,in the minds of most of our members is
probably what is what has come out fromthe regulatory agencies that would be
eligible for CRA for a , CongressionalReview Act disapproval resolution in
(08:31):
the first 60 days of this new Congress.
Ginny O'Neill (08:34):
It's a surprise that there's not as much as you would think.
And the two that are, thathave been finalized since.
July 15th are the 1033 rule, the opendata rule and the proposal on overdraft.
Kirsten Sutton (08:49):
I also just wanted to emphasize we just covered sort
of all of the restrictions aroundwhen and how this tool can be used.
There is a limited timeframe, andthere are a lot of things that I
believe congressional Republicansare going to be focused on.
And so a challenge that we have, youknow, I've talked to some bankers
who feel Really bullish like thisis great, under United Republican
(09:10):
rule, we're going to get relief on alot of the things that we care about.
Well, I think we won't see as manyconcerning and troublesome rulemakings
new rulemakings, as we might haveseen at the election of the results
of the election had been different.
This is not a magic wand situationwhere Congress can just step in and CRA
(09:31):
everything that we have a problem with.
There are a lot of other topics outsideof banking where I think congressional
leaders are going to be interestedin utilizing the CRA as a tool.
And I'll add that once something hasbeen CRA'd, it cannot be CRA'd again.
So like 1071, Congress already did that.
The president vetoed it and we're kindof back to the drawing board in terms of
(09:52):
figuring out how we're going to addressour very very deep and broad concerns over
that 1071 rulemaking, which was mandatedby the law that the agency had to do that.
So I think the message, Evan, oneof the messages here is even though
there are a couple things that Ginnyalluded to that could potentially
be CRA able, it doesn't mean that weare out of the woods on all of the
(10:14):
legislative issues and regulatory issuesthat our members are concerned with.
Even when that tool is available, itdoesn't mean Congress will use it.
So if we want, a finalized overdraftrule to be CRA'd, we're going to have
to go to Congress and advocate that it'sa good use of congressional calendar
time to actually do a CRA on that rule.
So we cannot be sitting back on ourlaurels and just thinking that all of
(10:37):
our regulatory problems are going away.
That, that's far from thecase for a bunch of reasons.
And Ginny can elaborate even more on that.
Evan Sparks (10:45):
Well, it sounds like, it sounds like this tool is one of
those like very specialized kind offood processors where you're like,
you get it out at Thanksgiving, butmost of the year you really need it
on Thanksgiving, but then the rest ofthe year it just sits in the cabinet.
Right.
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on your favorite podcast app.
So back to the conversation on the otherother CRA here , we've walked through
How it how it works we've walked throughkind of a couple of these big issues
I guess my question for for Ginny andkirsten is will aba be advocating for
CRA resolutions on these These potentissues that may these two issues that
(11:52):
may potentially be in the window and whatelse are we doing on those issue on those
issues to Continue to kind of keep up thepressure on our advocacy point of view You
Ginny O'Neill (12:03):
I mean, it's clearly something we're going to be discussing
a lot and have been discussing.
I think that on 1033, Kirsten and Iwere talking about previously there's
a question of whether, is it CRA able?
Probably, but what would you do thatwith it coming out on the other end.
(12:24):
And there are some people who thinkthat there should be more open banking.
So the other one is overdraft.
Kirsten Sutton (12:32):
I mentioned there are probably a number of different issues
that congressional Republicans would beinterested in using the CRA tool for.
And you typically, you want touse a CRA when you're uniting the
majority and dividing the minority.
Ginny mentioned on 10 33.
You know, I don't know if there is goingto be congressional interest in doing
(12:52):
a CRA on 10 33 and that's separate Evanfrom whether or not ABA will advocate
for that work conversations internallywith our bankers with our policy experts.
So unclear a little bit.
We didn't like the rule, but some inCongress were more favorable toward it.
So we'll see on overdraft.
The challenge we have on overdraftis even for those who ideologically
(13:14):
agree with our arguments on overdraft,it's just not popular back home.
And so for someone who's in a vulnerabledistrict or had kind of a tough reelect,
is that really something that they willThe congressional phrase is usually
walk the plank like is that a vote youwant to walk the plank on if you're a
vulnerable member, you might go to yourleadership and say, if I take this vote,
(13:34):
it's going to be a campaign commercialfor me two years from now when I'm
seeking reelection again, and like, dowe really want to go down that road if
there are all of these other rulemakingsfrom the Biden administration that may
be ripe that aren't divisive or don'tfeel like tough votes Politically.
And so those are the calculations thatthe Republicans in Congress are going
to be thinking through when they decidewhat and how to prioritize their series.
(13:59):
I think the flip side of that is itis pretty brazen, in my opinion, that
Director Chopra, if he finalizes thatrulemaking, that's a pretty brazen
act, and we're seeing a lot of Notjust congressional, but but in the
Republican Party in these new nomineesthat that President Trump is picking
a lot of sort of aggression towardthe CFPB, which is also always been
(14:21):
a very politicized agency, right?
So we're seeing a continuation of that.
And it is possible that simplyfor that reason that it's a bureau
rulemaking, maybe it moves up towardthe top of the list, just as a
repudiation of sort of Chopra politics.
Time will tell and, and absolutely ABAwill be engaged in conversations with
(14:41):
lawmaker, lawmakers over prioritizing theCRAs as a tool and the policy issues that
matter to ABA, both 1033 and overdraft,but really importantly, all of the other
issues that are not subject to CRA.
So I mentioned 1071.
Ginny and I have had severalmeetings about 1071 already today.
(15:01):
The reason that it was CRA'd in dividedgovernment was because Republicans
identified that there were Democratsthat they thought would vote with them.
And so that's why you saw the CRA beingutilized, even though you didn't have
unanimous party rule last Congress.
It was being used as a messagingtool to get some of those seats.
tough votes, even though those CRAsweren't being signed by President Biden.
(15:23):
On something like 1071, we still,we will have work to do with whoever
the new director of the agency is.
And we will have work to do withour congressional stakeholders to
try to find meaningful relief there.
Cause the other thing I'd mentioned whenI was at the CFPB, anything we did to try
to undo the work of the previous director,we were, In litigation immediately.
It was like the thought enters yourhead, the words are out your mouth,
(15:46):
and you're getting sued by someone.
So I absolutely think that that willcontinue and is something that we have
to be mindful of, that even if theagency tries to move in a different
direction that will not be withoutcontroversy and not without roadblocks.
So I think the long and short, thoughthis is kind of depressing, Evan,
is that relief is not going to beimmediate, and that there's still
quite a bit of work that we at ABA do,and that we need our bankers to join
(16:09):
us in to make sure that our policypriorities are top of mind, and that
they are getting across the finish line.
Evan Sparks (16:18):
Well, the, and I mean, and, and, You mentioned, Kirsten, like the
fact that there are a lot, all theseother issues and rate rules and that
the House Republicans and House andSenate Republicans are interested in
overturning and, and a 60 day time period.
And they're trying to do taxreform too, which we talked
to Joey Connor about, right?
I mean, there's, there's a limited,you've got to get, you're working on your
(16:40):
budget reconciliation resolution, right?
Is there a sense of about how many CRAresolutions they think they're going to
be able to get through in that time frame?
Do we know how they'regoing to prioritize that?
Ginny O'Neill (16:50):
If you look at, at the Trump administration, the first
time round, it gives you a good view.
And at that time they got 16 throughand that was a lot but of those 16,
only two involve banking issues.
So I think people have to be realistic.
And I think we all understand that theCRA is a tool and it's a powerful tool,
(17:11):
but it's only one of the tools we'll use.
We will continue to pursue the litigation.
We'll continue, we will work withthe leadership of the new agencies
to work on revising some of theserules that are outside the CRA window.
So there's a, as Kirsten said,there's a lot of work to be done.
Not, it's not all asfast as we would like.
(17:33):
But.
But with a, with banker engagement, we canget it done over the next couple of years.
Kirsten Sutton (17:37):
I spent most of my career as a congressional staffer.
And I like to tell people now, Itechnically I'm a lobbyist, but I
identify as a congressional stafferbecause that's still how my mind thinks.
So to the, to the question, like,how are they thinking through this?
How many are they going to get through?
If I'm them, it is, what isthe lowest hanging fruit?
What are the things that resonated withthe American people in this election
(17:59):
cycle and I think there will be a lot ofconversation with the Trump administration
about what do you want to prioritizeis it's going to be, you know, it could
be energy, border security, who knows.
But as Ginny said, banking issuesare never really top of mind for
Congress, like even during Dodd Frank,it was a struggle to get folks who
were off of banking and financialservices to pay attention to our stuff.
(18:22):
Like any member of Congress coulddo a town hall on on health care,
on the Affordable Care Act orObamacare, depending on which side
of the aisle you were coming from.
Almost no one was conversanton financial services issues.
So that's why, Ginny and I reallybelieve that we are going to have to
work and fight to, To make our prioritiescongressional priorities, whether that's
CRA related or big picture, when theythink about how to prioritize that tool,
(18:46):
though, they're going to be looking atfollowing through on the promises that
they all made on the campaign trail.
So whatever those things were that theywere talking about, lots of interest
in energy, there's labor stuff, right?
I think people are going to want to showwe're showing up on day one and we're
getting stuff done and we're undoingthe work of this last administration.
And we're going to unite our members.
(19:08):
As much as possible.
And so things that are potentiallycontroversial among Republicans or those
tough votes, I think are probably, itdoesn't mean they won't be considered.
It doesn't mean they're not possible,but my gut is that they will be
lower on the priority list and thensome of the things that seem more
like red meat conservative issues.
Evan Sparks (19:28):
All right, well, this was very helpful.
I hope our I'm sure our listenershave a much better sense of what
to expect on the CR the otherother CRA front going into 2025.
We will continue to have conversations onthe podcast about what to expect on the
legislative and regulatory horizon forthe net new year, although I know that
with this 60 day window, the CongressionalReview Act is obviously going to be
(19:50):
something that we need to think aboutearly on in the year to the extent that
any of these resolutions are going to beaffecting the financial services sector.
So Ginny, Kirsten, thank youboth for being on the show.
Kirsten Sutton (20:00):
Thanks for having us.
Evan Sparks (20:02):
Thank you again to our sponsor, TransUnion.
You can find this andprevious episodes at aba.
com slash banking journal podcast.
You can also find us on any of yourfavorite podcast apps or platforms.
Thanks so much for listening and we'llbe back with you again very soon.
I think we all understand that the CRA is a tool
(00:03):
and it's a powerful tool, but it'sonly one of the tools we'll use.
We will continue to pursue the litigation.
We will work with the leadershipof the new agencies to work on
revising some of these rulesthat are outside the CRA window.
There's a lot of work to be done.
It's not all as fast as we would like.
Evan Sparks (00:26):
From the American Bankers Association, this is
the ABA Banking Journal podcast.
Welcome back.
Today's episode is presented by TransUnionand I'm delighted to have bring two of
my colleagues in our policy area togetherfor a conversation on a a big issue
that's going to be facing the industry andCongress in the very first months of 2025.
(00:47):
And that is the other CRA Reallykind of the other other CRA because
we have the Community ReinvestmentAct, we have the Consumer Reporting
Agencies, and then we also have theCongressional Review Act, which every
four to eight years comes up as anissue that we are going to talk about.
So and to, to talk about theCongressional Review Act with me, I
have my colleague, Kirsten Sutton.
(01:08):
Kirsten is Executive Vice Presidentfor Congressional Relations and
Legislative Affairs here at ABA.
And Ginny O'Neill.
Ginny is executive vicepresident for regulatory and
compliance policy here at ABA.
And and both of you can go reallydeep on this other, other CRA.
So thanks for being on the show.
Kirsten Sutton (01:27):
Thanks for having us excited to talk about it.
Evan Sparks (01:30):
All right.
So Kirsten, I'd love it if I could kindof take, give it to you first to explain
what this mechanism is, And, and the,the broad contours of how it works, why
the Congressional Review Act exists,and what it allows Congress to do.
Kirsten Sutton (01:44):
Yeah, so thank you.
And I'll, I'll give the disclaimer.
So I'm not a lawyer, thankfully Ginnyis, but as a long time congressional
Staffer had a number of experiencessort of interacting with the CRA.
And also when I was chief of staffat the CFPB, there were a couple of
bureau rulemakings that were CRA.
So Ginny and I are excitedto talk about those.
But the Congressional Review Act is atool that Congress has when it essentially
(02:08):
wants to invalidate a rulemakingthat has been finalized by an agency.
So it is considered under sort ofspecial circumstances that make it a
little bit easier to get it passed.
It has to be signed by the president inorder to go into an effect into effect.
But when Congress enacts a CongressionalReview Act, not only does it essentially
rescind and sort of invalidate thatagency's rulemaking, importantly, it
(02:32):
also says to the agency it cannot reissuea substantially similar rulemaking.
So it kind of ties the agency's hands.
Going forward that they can't justsay, okay, well, we're going to change
a couple things around the fringesand then just reissue a new rule.
They literally can't do anything similarto the rulemaking that was CRA'd.
Evan Sparks (02:50):
That's which, which makes sounds like, and the other key
thing, it's like Congress can acton a simple majority basis, right?
Kirsten Sutton (02:56):
This is a filibuster.
That was a really good point, Evan.
There are very few things that onlyneed a simple majority in the Senate.
It's reconciliation, it's nominations, andit's the Congressional Review Act vote.
So rather than having to hit that 60vote threshold, it makes it easier
for items to get through the Senate byonly requiring that simple majority.
Evan Sparks (03:17):
Ginny, I know there's a A window that Congress can use where
Congress can look, look back to kindof examine these rules and decide if
they're going to vote on a CRA resolution.
What, what is that window once thenew Congress comes in, starting
in, I guess, starting January 3rd?
Ginny O'Neill (03:36):
Okay.
Let me just say that there are, thereare two different CRA opportunities.
One is exists for everyrule that Congress writes.
So it is at the Congress, I mean,the regulator writes, the regulator
has to submit it to Congress.
And then Congress has 60 daysto decide whether to bring it
up for a vote to disapprove it.
(03:59):
But What you were talking about, Evan,is at the end of an administration when
when the regulators tend to write whatare known as quote unquote midnight rules.
And that's when they're trying to getall their work tied up at the end.
And that.
gives the congress has a the CRA hasa look back period and it allows the
(04:22):
them to reach back and consider forCRA resolution any rule that has been
finalized in the last 60 session days.
And so those are days where congressactually worked and those session days you
never know exactly until they Sign out.
But the session days extend.
(04:42):
It's not just five days a week.
It's only days Congress worked.
The best estimates right now thatwe have are that it probably extends
this look back period till July15th, somewhere around that time.
So any rule finalized since July15 Congress has the opportunity to
(05:03):
take a look at and decide whetherto issue a disapproval resolution.
Kirsten Sutton (05:07):
That's a really important point, though, because it's not like any
rulemaking that was done at any point.
Congress is just going to beable to pick up the ball and run.
There's a limited window based on whenthe rule was finalized and sort of
these congressional calendar days thatGinny mentioned, just sort of a runway.
And we saw when Trump becamepresident the first time.
(05:28):
This was really when this tool, atleast that I remember, Ginny, I'd be
curious if you have knowledge of kind ofhow regularly it was used going back a
little bit before my time in Congress.
But in kind of the last 20 years, youknow, Trump picked it up and ran with it.
And so we, we saw something that Icandidly hadn't really heard of as
a tool, even as a staffer before hebecame president, all of a sudden
(05:48):
it was like, everybody's talkingabout CRA and what can we see?
Ginny O'Neill (05:51):
And the reason for that is that even though this has been
around since 1996 and it was enactedis you have to have one party control.
You have to have the House, the Senateand the President all under the same
control so that you can actually getthe two parts of Congress and then
the President to sign it into law.
(06:11):
So that's why you soughtso much with Trump.
Evan Sparks (06:14):
And the only time you're going to get a president willing to sign
a resolution that's invalidating an activeadministrative or executive branch agency
is when you have is when you have thatcross party switch in the presidency.
Kirsten Sutton (06:29):
Right, I mean when Democrats had united control during,
The Dodd Frank Act, health care reform,you know, we weren't seeing CRAs
coming through, so it is a unique tool.
Ginny, I think, I think you've saidthe Trump administration did 16 in,
in the very beginning of the Congresswhen there was united Republican rule.
Last time I was on theHill when that happened.
Started, but over at the CFPBsort of when it was ending.
(06:53):
And I think really important to note,so we saw for those who who were
paying attention, the arbitrationrule of the CFPB and indirect auto
were, were both included in that list.
Ginny O'Neill (07:04):
And, and the point that's important there is in the
Congressional Review Act, though,the definition of a rule is broad, it
is not just what you think of as anAdministrative Procedure Act final rule.
It also includes things like guidance.
And that's where we saw it inTrump 1 when there was indirect
(07:27):
auto guidance issued by the CFPB.
Congress submitted it to the, aquestion to the GAO, is this a
rule under the Congressional ReviewAct, and the answer came back, yes.
And so then they were able todisapprove of that piece of guidance.
So,
Evan Sparks (07:44):
and my understanding on that, if I remember from writing
about it in ABA Daily Newsbytes wayback when, is that once the GAO made a
determination that this piece of guidancewas a rule, that restarted the clock
on the potential for a CRA resolution.
Ginny O'Neill (08:01):
It made the agency submit it to Congress like a rule.
And then that restarts the clock.
Start at the clock.
Evan Sparks (08:08):
All right.
Well, I mean, there are a lotof interesting dynamics here.
I think the question on the, on my,in the minds of most of our members is
probably what is what has come out fromthe regulatory agencies that would be
eligible for CRA for a , CongressionalReview Act disapproval resolution in
(08:31):
the first 60 days of this new Congress.
Ginny O'Neill (08:34):
It's a surprise that there's not as much as you would think.
And the two that are, thathave been finalized since.
July 15th are the 1033 rule, the opendata rule and the proposal on overdraft.
Kirsten Sutton (08:49):
I also just wanted to emphasize we just covered sort
of all of the restrictions aroundwhen and how this tool can be used.
There is a limited timeframe, andthere are a lot of things that I
believe congressional Republicansare going to be focused on.
And so a challenge that we have, youknow, I've talked to some bankers
who feel Really bullish like thisis great, under United Republican
(09:10):
rule, we're going to get relief on alot of the things that we care about.
Well, I think we won't see as manyconcerning and troublesome rulemakings
new rulemakings, as we might haveseen at the election of the results
of the election had been different.
This is not a magic wand situationwhere Congress can just step in and CRA
(09:31):
everything that we have a problem with.
There are a lot of other topics outsideof banking where I think congressional
leaders are going to be interestedin utilizing the CRA as a tool.
And I'll add that once something hasbeen CRA'd, it cannot be CRA'd again.
So like 1071, Congress already did that.
The president vetoed it and we're kindof back to the drawing board in terms of
(09:52):
figuring out how we're going to addressour very very deep and broad concerns over
that 1071 rulemaking, which was mandatedby the law that the agency had to do that.
So I think the message, Evan, oneof the messages here is even though
there are a couple things that Ginnyalluded to that could potentially
be CRA able, it doesn't mean that weare out of the woods on all of the
(10:14):
legislative issues and regulatory issuesthat our members are concerned with.
Even when that tool is available, itdoesn't mean Congress will use it.
So if we want, a finalized overdraftrule to be CRA'd, we're going to have
to go to Congress and advocate that it'sa good use of congressional calendar
time to actually do a CRA on that rule.
So we cannot be sitting back on ourlaurels and just thinking that all of
(10:37):
our regulatory problems are going away.
That, that's far from thecase for a bunch of reasons.
And Ginny can elaborate even more on that.
Evan Sparks (10:45):
Well, it sounds like, it sounds like this tool is one of
those like very specialized kind offood processors where you're like,
you get it out at Thanksgiving, butmost of the year you really need it
on Thanksgiving, but then the rest ofthe year it just sits in the cabinet.
Right.
So I'm going to take a quick moment hereto thank our sponsor for this episode.
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(11:08):
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(11:32):
on your favorite podcast app.
So back to the conversation on the otherother CRA here , we've walked through
How it how it works we've walked throughkind of a couple of these big issues
I guess my question for for Ginny andkirsten is will aba be advocating for
CRA resolutions on these These potentissues that may these two issues that
(11:52):
may potentially be in the window and whatelse are we doing on those issue on those
issues to Continue to kind of keep up thepressure on our advocacy point of view You
Ginny O'Neill (12:03):
I mean, it's clearly something we're going to be discussing
a lot and have been discussing.
I think that on 1033, Kirsten and Iwere talking about previously there's
a question of whether, is it CRA able?
Probably, but what would you do thatwith it coming out on the other end.
(12:24):
And there are some people who thinkthat there should be more open banking.
So the other one is overdraft.
Kirsten Sutton (12:32):
I mentioned there are probably a number of different issues
that congressional Republicans would beinterested in using the CRA tool for.
And you typically, you want touse a CRA when you're uniting the
majority and dividing the minority.
Ginny mentioned on 10 33.
You know, I don't know if there is goingto be congressional interest in doing
(12:52):
a CRA on 10 33 and that's separate Evanfrom whether or not ABA will advocate
for that work conversations internallywith our bankers with our policy experts.
So unclear a little bit.
We didn't like the rule, but some inCongress were more favorable toward it.
So we'll see on overdraft.
The challenge we have on overdraftis even for those who ideologically
(13:14):
agree with our arguments on overdraft,it's just not popular back home.
And so for someone who's in a vulnerabledistrict or had kind of a tough reelect,
is that really something that they willThe congressional phrase is usually
walk the plank like is that a vote youwant to walk the plank on if you're a
vulnerable member, you might go to yourleadership and say, if I take this vote,
(13:34):
it's going to be a campaign commercialfor me two years from now when I'm
seeking reelection again, and like, dowe really want to go down that road if
there are all of these other rulemakingsfrom the Biden administration that may
be ripe that aren't divisive or don'tfeel like tough votes Politically.
And so those are the calculations thatthe Republicans in Congress are going
to be thinking through when they decidewhat and how to prioritize their series.
(13:59):
I think the flip side of that is itis pretty brazen, in my opinion, that
Director Chopra, if he finalizes thatrulemaking, that's a pretty brazen
act, and we're seeing a lot of Notjust congressional, but but in the
Republican Party in these new nomineesthat that President Trump is picking
a lot of sort of aggression towardthe CFPB, which is also always been
(14:21):
a very politicized agency, right?
So we're seeing a continuation of that.
And it is possible that simplyfor that reason that it's a bureau
rulemaking, maybe it moves up towardthe top of the list, just as a
repudiation of sort of Chopra politics.
Time will tell and, and absolutely ABAwill be engaged in conversations with
(14:41):
lawmaker, lawmakers over prioritizing theCRAs as a tool and the policy issues that
matter to ABA, both 1033 and overdraft,but really importantly, all of the other
issues that are not subject to CRA.
So I mentioned 1071.
Ginny and I have had severalmeetings about 1071 already today.
(15:01):
The reason that it was CRA'd in dividedgovernment was because Republicans
identified that there were Democratsthat they thought would vote with them.
And so that's why you saw the CRA beingutilized, even though you didn't have
unanimous party rule last Congress.
It was being used as a messagingtool to get some of those seats.
tough votes, even though those CRAsweren't being signed by President Biden.
(15:23):
On something like 1071, we still,we will have work to do with whoever
the new director of the agency is.
And we will have work to do withour congressional stakeholders to
try to find meaningful relief there.
Cause the other thing I'd mentioned whenI was at the CFPB, anything we did to try
to undo the work of the previous director,we were, In litigation immediately.
It was like the thought enters yourhead, the words are out your mouth,
(15:46):
and you're getting sued by someone.
So I absolutely think that that willcontinue and is something that we have
to be mindful of, that even if theagency tries to move in a different
direction that will not be withoutcontroversy and not without roadblocks.
So I think the long and short, thoughthis is kind of depressing, Evan,
is that relief is not going to beimmediate, and that there's still
quite a bit of work that we at ABA do,and that we need our bankers to join
(16:09):
us in to make sure that our policypriorities are top of mind, and that
they are getting across the finish line.
Evan Sparks (16:18):
Well, the, and I mean, and, and, You mentioned, Kirsten, like the
fact that there are a lot, all theseother issues and rate rules and that
the House Republicans and House andSenate Republicans are interested in
overturning and, and a 60 day time period.
And they're trying to do taxreform too, which we talked
to Joey Connor about, right?
I mean, there's, there's a limited,you've got to get, you're working on your
(16:40):
budget reconciliation resolution, right?
Is there a sense of about how many CRAresolutions they think they're going to
be able to get through in that time frame?
Do we know how they'regoing to prioritize that?
Ginny O'Neill (16:50):
If you look at, at the Trump administration, the first
time round, it gives you a good view.
And at that time they got 16 throughand that was a lot but of those 16,
only two involve banking issues.
So I think people have to be realistic.
And I think we all understand that theCRA is a tool and it's a powerful tool,
(17:11):
but it's only one of the tools we'll use.
We will continue to pursue the litigation.
We'll continue, we will work withthe leadership of the new agencies
to work on revising some of theserules that are outside the CRA window.
So there's a, as Kirsten said,there's a lot of work to be done.
Not, it's not all asfast as we would like.
(17:33):
But.
But with a, with banker engagement, we canget it done over the next couple of years.
Kirsten Sutton (17:37):
I spent most of my career as a congressional staffer.
And I like to tell people now, Itechnically I'm a lobbyist, but I
identify as a congressional stafferbecause that's still how my mind thinks.
So to the, to the question, like,how are they thinking through this?
How many are they going to get through?
If I'm them, it is, what isthe lowest hanging fruit?
What are the things that resonated withthe American people in this election
(17:59):
cycle and I think there will be a lot ofconversation with the Trump administration
about what do you want to prioritizeis it's going to be, you know, it could
be energy, border security, who knows.
But as Ginny said, banking issuesare never really top of mind for
Congress, like even during Dodd Frank,it was a struggle to get folks who
were off of banking and financialservices to pay attention to our stuff.
(18:22):
Like any member of Congress coulddo a town hall on on health care,
on the Affordable Care Act orObamacare, depending on which side
of the aisle you were coming from.
Almost no one was conversanton financial services issues.
So that's why, Ginny and I reallybelieve that we are going to have to
work and fight to, To make our prioritiescongressional priorities, whether that's
CRA related or big picture, when theythink about how to prioritize that tool,
(18:46):
though, they're going to be looking atfollowing through on the promises that
they all made on the campaign trail.
So whatever those things were that theywere talking about, lots of interest
in energy, there's labor stuff, right?
I think people are going to want to showwe're showing up on day one and we're
getting stuff done and we're undoingthe work of this last administration.
And we're going to unite our members.
(19:08):
As much as possible.
And so things that are potentiallycontroversial among Republicans or those
tough votes, I think are probably, itdoesn't mean they won't be considered.
It doesn't mean they're not possible,but my gut is that they will be
lower on the priority list and thensome of the things that seem more
like red meat conservative issues.
Evan Sparks (19:28):
All right, well, this was very helpful.
I hope our I'm sure our listenershave a much better sense of what
to expect on the CR the otherother CRA front going into 2025.
We will continue to have conversations onthe podcast about what to expect on the
legislative and regulatory horizon forthe net new year, although I know that
with this 60 day window, the CongressionalReview Act is obviously going to be
(19:50):
something that we need to think aboutearly on in the year to the extent that
any of these resolutions are going to beaffecting the financial services sector.
So Ginny, Kirsten, thank youboth for being on the show.
Kirsten Sutton (20:00):
Thanks for having us.
Evan Sparks (20:02):
Thank you again to our sponsor, TransUnion.
You can find this andprevious episodes at aba.
com slash banking journal podcast.
You can also find us on any of yourfavorite podcast apps or platforms.
Thanks so much for listening and we'llbe back with you again very soon.
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