I’m tempted to just leave this entire column blank and simply use that headline, because I’m really both confounded and absolutely not confused about the reasoning behind the Office of Management and Budget’s recent announcement that any and all guidance and rules issued by “independent agencies” must be submitted to the OMB beginning May 11.
David Baumann, our Washington, D.C. correspondent-at-large, broke this news to our readers almost two weeks ago. He’s taken the time to digest the 15-page memo from the OMB and has a full story in this week’s issue. Please read. Also, we have a lot more planned on this story to help our readers understand what’s going on.
Until then, I’ve spent the past couple of days slowly reading the 15-page document and all of the footnotes over and over. And after reading it, I was visualizing how this would be swallowed by, not only the credit union industry, but other financial branches that would now be required to follow this new order from the administration. All I could come up with was, “It’s gotta taste like veggies and NyQuil.” The vegetables are our daily allowance of vitamins and regulations that we don’t necessarily love. And the NyQuil is the OMB’s way of putting us all to sleep while this mandate goes into effect. We wake up foggy and unable to decipher what the hell just happened. To be ultra-clear, this isn’t some conservative versus liberal stance. This is a disgusting drugging of our independent agencies to be under the control of one (maybe two) person (people): Mick Mulvaney and President Trump. If the Carter Administration had pulled something like this, I’d say the same thing.
Mulvaney is openly and on-the-record against the organizations he’s served and continues to serve as Trump’s pick to lead the CFPB (former acting director), the OMB (current director? He’s listed as that but Russell Vought has also been named as acting director. Who knows anymore), and now White House Chief-of-Staff (acting). He’s part of the Tea Party Caucus and is beyond the middle-of-the-road fiscal Republican conservative. While publicly Mulvaney has said, as a congressman from South Carolina and as a Trump Administration official, that he wanted to drastically reduce government spending. As OMB director he said this year that “nobody cares” about the deficit. So I’m confused about where he stands anymore on most topics except that his decisions out-front and behind-the-scenes are meant to disrupt, disassemble and centralize power. And then there’s President Trump. I’m not going into all of that except to say it appears to be the same view as Mulvaney’s: Disrupt, disassemble and centralize power.
And, as I and others have read the OMB’s memo (M-19-14), that’s the most glaringly obvious takeaway – centralizing the financial industry under the executive branch. In Baumann’s story, former NCUA board member Geoff Bacino put it this way, “If you’re an administration, it makes sense,” he said. “You want to control everything.”
In very simple terms, the OMB’s memorandum puts it like this: The agency (the NCUA, others) comes up with a new rule or guidance that has an “annual effect on the economy of $100,000,000 or more; that goes to the Office of Information and Regulatory Affairs and if it’s all good for them it goes through the Congressional Review Act process. If more information is needed, it goes back to the agency to resubmit the filing; once the CRA is all set, then both houses of Congress must pass a joint resolution on the new rule/guidance.
(Editor’s note: Please see detailed sketch I drew of the process, which includes Godzilla wearing glasses.)
Can it then be vetoed by the President? I don’t know. But the main purpose of this new OMB move is clearly stated as, “This Memorandum reinforces the obligations of Federal agencies under the CRA in order to ensure more consistent compliance with its requirements across the Executive Branch.”
Meaning, the way independent financial regulatory agencies have worked in the past must now go through the White House, because the OMB is a function inside the Executive branch. Also, the memo vaguely states to work with your OIRA representative if you have questions. Also, any debate about the joint resolution cannot last longer than 10 hours combined in both the House of Representatives and the Senate. Also, no judicial review of the joint resolution is allowed. I’m pretty damn sure the OMB cannot make a demand that congressional actions not go to court. Not only is that straight-up insane – that’s crossing the line and/or blowing up the line that is supposed to separate the Executive and Judicial branches of government.
To step back from the full OMB memorandum, I had a pretty simple idea: What does it say on the “About Us” page of the NCUA and OMB’s websites? Maybe that would provide some insight to help my confoundedness.
Here’s what it says, word-for-word:
The NCUA: Created by the U.S. Congress in 1970, the National Credit Union Administration is an independent federal agency that insures deposits at federally insured credit unions, protects the members who own credit unions, and charters and regulates federal credit unions.
The OMB: The Office of Management and Budget (OMB) serves the President of the United States in overseeing the implementation of his vision across the Executive Branch. Specifically, OMB’s mission is to assist the President in meeting his policy, budget, management and regulatory objectives and to fulfill the agency’s statutory responsibilities.
If there were a way to have those two statements come flying at your face in virtual reality-style, I would have done that. Alas, I just underlined what I felt were important distinctions between the two organizations.
There are similar statements from the independent financial regulators out there. The impact of this decision goes far beyond the NCUA and credit unions. But, it most definitely will have a direct impact on what does and does not happen inside our industry and the lives of your CU members.
Eat your vegetables and you’ll be fine. Do not take that side of NyQuil along with it. It’s a very bad combination.
Michael Ogden is editor-in-chief for CU Times. He can be reached at firstname.lastname@example.org.