Overnight Regulation: GOP flexes power over consumer agency | Trump lets states expand drone use | Senate panel advances controversial EPA pick | House passes bill to curb ‘sue-and-settle’ regs

Welcome to Overnight Regulation, your daily rundown of news from the federal agencies, Capitol Hill, the courts and beyond. It’s Wednesday night in Washington, Republicans are arguing with each other with tax reform and the budget in the balance, and with Democrats over the latest dossier revelations. In other words, a normal Wednesday.

 

THE BIG STORY

Republicans scored their biggest victory yet against the Consumer Financial Protection Bureau (CFPB) late Tuesday, ending its push to regulate forced arbitration for years to come.

By nixing the arbitration measure through the Congressional Review Act (CRA), lawmakers effectively banned any federal agency from issuing a similar rule.

The GOP action sends a message to the CFPB that Republicans are willing and able to block its work, while Democrats and progressive groups wonder what the bureau’s future holds.

{mosads}

The Senate voted to repeal the CFPB arbitration rule 51- 50 on Tuesday, with Vice President Mike Pence casting the tie-breaking vote. GOP Sens. Lindsey Graham (S.C.) and John Kennedy (La.) broke from their party and voted against the repeal effort.

What’s the arbitration rule? The rule would have barred banks and credit card companies from writing “forced arbitration” clauses into customer contracts. The contract language typically bars customers from joining class-action lawsuits against companies, forcing them to resolve disputes through a third-party mediator.

Who benefits from this? Banks and large businesses. It will now be harder for consumers to take banks to court. The rule’s repeal is one of the most significant and enduring victories for critics of the Dodd-Frank financial reform law, and was widely praised by groups like the U.S. Chamber of Commerce and the Consumer Bankers Association.

Read Sylvan Lane’s story here

 

ON TAP FOR THURSDAY

The Senate Homeland Security and Governmental Affairs Subcommittee on Regulatory Affairs and Federal Management holds a hearing “to examine improving oversight of the regulatory process, focusing on lessons from state legislatures.”

The Senate Committee on Small Business and Entrepreneurship holds a hearing to “examine strengthening the entrepreneurial ecosystem for women.”

The House Judiciary Subcommittee on Immigration and Border Security holds a hearing on “Oversight of the United States Refugee Admissions Program.”

 

REGULATORY ROUNDUP

Lawsuits: The House passed legislation Wednesday to create new public notice and comment requirements before agencies can immediately settle lawsuits brought by pro-regulatory groups.

The Sunshine for Regulatory Decrees and Settlements Act of 2017, introduced by Rep. Doug Collins (R-Ga.), requires agencies to publicly publish any negotiated sue-and-settle consent decrees and legal settlement agreements, which compel an agency to undertake a new rulemaking, at least 60 days before they’re filed in court.

The legislation gives interested parties the opportunity to intervene in the litigation and join in on the negotiations.

The bill, tucked into a package of three bills titled the Congressional Article I Powers Strengthening Act, passed 234-187 despite Democratic opposition.

Rep. John Conyers (D-Mich.) said the legislation threatens critical public health and safety protections by opening the door for industry opponents to stifle agency rulemakings.

He said an agency would be forced to go through two public comment periods – one for the consent decree and one for the actual rulemaking – doubling the agency’s efforts.

But Rep. Bob Goodlatte (R-Va.) claimed the bill is about restoring Congress’s Article I powers.

Lydia Wheeler has the details here.

 

Transportation: The Trump administration is allowing state and local governments to significantly expand their drone operations, a step that is intended to accelerate the integration of unmanned aircraft into the national airspace.

President Trump on Wednesday signed a presidential memorandum directing the Federal Aviation Administration (FAA) to create a pilot program that allows localities to propose expanded drone operations that include flights over people, nighttime operations and flying beyond the visual line of sight — all of which are currently prohibited.

The FAA will have one year to establish the pilot program, which will allow the agency to enter into agreements with state, local and tribal governments to transform their jurisdictions into “[unmanned aircraft systems] innovation zones” for testing novel drone operations.

Melanie Zanona has more here.

 

Technology: The FCC will be voting to roll back prohibitions barring one company or person from owning both a newspaper and broadcast station in the same area, FCC Chairman Ajit Pai announced Wednesday.

The chairman has been dogged by Democratic attacks over his response to President Trump’s threats against critical media outlets, and on Wednesday he painted the move as part of his commitment to the First Amendment.

Critics say deregulating the media industry will lead to extreme consolidation, paving the way for media giants such as the Sinclair Broadcast Group to monopolize local news organizations.

Harper Neidig has more here

 

Labor: A Labor Department proposal to kill an Obama-era rule preventing employers from pooling workers’ tips is now under White House review, Lydia Wheeler reports.

The White House Office of Information and Regulatory Affairs (OIRA) received the proposed rule from the Labor Department on Tuesday according to the list of regulations under review.

In the semi-annual Unified Regulatory Agenda in July, the agency announced plans to rescind the current restriction on tip pooling by employers that pay tipped employees the full minimum wage under the Fair Labor Standards Act. The change would allow restaurants, for example, to share the tips waiters receive with untipped workers, such as cooks.

Read Lydia’s story here.

 

Environment: President Trump’s controversial nominee to lead the Environmental Protection Agency’s (EPA) chemical safety office advanced out of a Senate committee on Wednesday.

The Senate Environment and Public Works Committee voted 11-10 to advance Michael Dourson’s nomination. The vote fell along party lines, with all Republicans in favor and all Democrats opposed.

By the same 11-10 party-line vote, the panel approved William Wehrum, a lawyer for industry clients, to lead the EPA’s important air and radiation office, which oversees air pollution, climate change regulations, car pollution standards and other major programs.

Timothy Cama has the story here.

 

Environment: A draft version of the Interior Department’s five-year strategic plan does not mention anything about climate change, including whether the agency plans to fight it or how it will adapt.

The draft, first reported by The Nation, focuses heavily on plans to produce more fossil fuels and other forms of energy on public lands and the nation’s outer continental shelf.

“The DOI provides access to and manages energy and other resources including oil, gas, coal, water, timber, grazing, and non‐energy minerals on public lands and the Outer Continental Shelf (OCS),” reads a part of the draft plan that describes how the agency will generate revenue and use natural resources.

Read more from Timothy Cama here.

 

Environment: The Environmental Protection Agency (EPA) on Wednesday said it would reassess the way it issues Clean Air Act pollution permits for new facilities, as a way to reduce regulatory burdens for businesses.

As part of a review President Trump mandated earlier this year, the EPA said it would undertake four new initiatives to re-evaluate how it regulates pollution.

The most notable of those is the creation of a new task force to reconsider the permitting process for new sources of air pollution under the Clean Air Act, called the New Source Review (NSR).

The EPA issues three types of permits for newly built or modified facilities such as power plants, which set site-specific pollution requirements.

But commenters told the EPA the review process is lengthy, complex and costly, and suggested a handful of ways to improve the process.

Read more from Devin Henry here.

 

Health: Food and Drug Administration Commissioner Scott Gottlieb said Wednesday the agency will promote the use of drugs to help people addicted to opioids.

The use of “medication-assisted treatment” (MAT), which uses drugs and counseling to combat addiction, has been somewhat controversial because some argue it simply replaces one drug with another.

Gottlieb said the FDA will combat that stigma. Many studies have shown that MAT is the most effective way to deal with opioid addiction.

Jessie Hellmann has the story here.

 

Administration: The Department of Justice (DOJ) is weighing in on a lawsuit regarding so-called free speech zones on a California college campus.

In a sharply worded brief filed in a U.S. District Court on Tuesday, the DOJ argued that by corralling free speech in specified zones, Pierce College has violated its students’ First Amendment rights.

But the DOJ’s argument extends far beyond the Los Angeles community college. The brief warns of a larger epidemic of suppression of free speech and expression at colleges and universities across the country, and asserts the U.S. government’s need to protect “constitutional freedoms in institutions of higher learning.”

Max Greenwood has more here.

 

Finance: President Trump won’t nominate National Economic Council Director Gary Cohn as the next chairman of the Federal Reserve, Bloomberg reported on Wednesday.

A source told the news outlet that Trump wants to keep Cohn at the White House to help get tax reform through Congress.

Cohn is expected to leave the White House at the conclusion of the tax reform push, two sources added.

Read more here.

 

ELSEWHERE IN THE NEWS:

Clearinghouses push back against worries over their size (The Wall Street Journal)

SEC halts Chicago exchange’s speed-bump plan (The Wall Street Journal)

Advocates vow to fight for consumers’ right to sue banks (CNBC)

Tech companies and US lawmakers are clashing over the need for new regulations targeting political ads (Recode)

Equifax faces UK regulatory investigation over cyber attack (Bloomberg)

Australia publishes draft laws for related fintech regulations (Reuters)