Welcome to Overnight Regulations, your daily rundown of news from the federal agencies, Capitol Hill and the courts. It’s Thursday evening here in Washington where the White House is firing back at a new book about the Trump administration. Read about it here.
THE BIG STORIES
Attorney General Jeff Sessions is following through on his long expected plan to crack down on marijuana.
Sessions rolled back an Obama-era policy Thursday that allowed states to legalize marijuana for medical and/or recreational use. He rescinded guidance, known as the Cole memo, which directed U.S. states attorneys not to charge people with marijuana-related offenses in states where the drug is legal.
For more on Sessions’s decision, click here.
Here’s what Sessions said in the new memo:
Federal prosecutors should revert back to 1980 principles when deciding which marijuana activities to prosecute. Those principles require prosecutors to weigh federal law enforcement priorities set by the attorney general, the seriousness of the crime, the deterrent effect of criminal prosecution and the cumulative impact of particular crimes on the community.
To read Sessions’s memo, click here.
{mosads}
Here’s why this is a big deal:
Sessions is essentially telling federal prosecutors to ignore state laws and start cracking down on marijuana. As Reid Wilson reports, each United States attorney, appointed by the Trump administration, could decide to prosecute legal marijuana businesses and business owners under federal law. That threw the booming marijuana industry into chaos Thursday, with stock prices falling.
Reid’s story about how the marijuana industry is responding to the news is here.
Lawmakers react:
Sessions is facing a barrage of criticism from both parties for ending a policy that gave states the flexibility to allow sales of recreational marijuana.
Republicans, primarily from states that have legalized marijuana, joined Democrats in slamming the decision and vowing to take action to pressure Sessions to reverse course.
Sen. Cory Gardner (R-Colo.) took to the Senate floor to assert that Sessions had told him before his confirmation as attorney general that he didn’t plan to try to reverse his state’s policies legalizing marijuana.
“I would like to know from the attorney general what has changed,” Gardner said. “What has changed the president’s mind? Why is Donald Trump thinking differently than what he promised the people of Colorado?”
Cristina Marcos and Jordain Carney have the story here.
REG ROUNDUP
Healthcare: A Trump administration proposal to allow more flexibility to groups and small businesses who band together to buy health insurance could undermine the stability of the ObamaCare marketplace, experts warn.
Under a proposed rule released Thursday by the Department of Labor, small businesses and self-employed individuals would be allowed to join together in an “association health plan.”
The proposed rule was issued in response to an executive order by President Trump and would allow those associations to purchase cheaper health insurance that’s not subject to some of the key ObamaCare insurance rules. Republicans blame those rules for rising insurance premiums.
Under current law, small businesses and self-employed workers that buy insurance through associations are considered to be part of ObamaCare’s individual market and are subject to all the law’s rules and regulations.
Nathaniel Weixel has the story here.
Energy: The Trump administration is proposing to greatly expand the areas available for offshore oil and natural gas drilling, including off the Pacific and Atlantic coasts.
In the first major step toward the administration’s promised expansion of offshore drilling, Interior Secretary Ryan Zinke said nearly all of the nation’s outer continental shelf is being considered for drilling, including areas off the coasts of Maine, California, Florida and Alaska.
The proposal, which environmentalists immediately panned as an environmental disaster and giveaway to the fossil fuel industry, is far larger than what was envisioned in President Trump’s executive order last year seeking a new plan for the future of auctions of offshore drilling rights. That order asked Zinke to consider drilling expansions in the Atlantic and Arctic oceans.
“This is a start on looking at American energy dominance and looking at our offshore assets and beginning a dialogue of when, how, where and how fast those offshore assets should be, or could be, developed,” Zinke told reporters Thursday.
Timothy Cama has the story here.
Reaction… The move invited quick pushback from Florida Republicans. Sen. Marco Rubio (R-Fla.) proposed extending a moratorium on drilling in parts of the Gulf of Mexico near Florida. In a statement, Rubio asked Zinke to take the eastern Gulf off the table. More on that here.
Florida Gov. Rick Scott (R) also opposes the move. Scott said Thursday he had asked to “immediately meet” with Zinke to discuss the plan. More on that here.
Finance: The Securities and Exchange Commission (SEC) warned investors Thursday that those firms and brokers who offer cryptocurrency investments are often breaking federal trading laws.
In a joint statement, SEC Chairman Jay Clayton and commissioners Kara Stein and Michael Piwowar also said the agency faces severe challenges in recovering losses for jilted cryptocurrency investors.
The SEC has reviewed cryptocurrencies that are traded as securities, holding them subject to the same disclosure laws as other commonly traded assets. The agency has also blocked initial coin offerings (ICOs), sales of cryptocurrencies meant to raise capital for a business, that don’t follow federal trading laws.
Sylvan Lane has the story here.
Finance: The Commodity Futures Trading Commission (CFTC) said Thursday that it will meet on Jan. 31 to discuss the trading of cryptocurrency futures contracts.
The agency says that its technology and risk advisory committees will meet to discuss the self-certification process for such derivative contracts, focusing on “oversight, surveillance, and monitoring” of listed cryptocurrency derivatives.
The meeting comes after two exchanges launched bitcoin futures in December.
The value of major digital currencies like bitcoin, Ethereum and Ripple have increased by thousands of percent over the past year.
Sylvan Lane has more here.
Tech: Federal Communications Commission (FCC) Chairman Ajit Pai decided not to attend the Consumer Electronics Show this week after receiving death threats, Recode reported Thursday.
An FCC spokesman declined to confirm the report, saying in an email to The Hill, “We do not comment on security measures or concerns.”
According to the news outlet, which cited two agency sources, the details on the threats are still unclear.
It’s not the first threat the chairman has faced in recent months. As Pai was chairing an agency vote to overturn the Obama-era net neutrality rules last month, the meeting room was abruptly evacuated because of a bomb threat. Beyond the room, the target was not clear. But Pai and his family have faced harassment over the controversial decision to repeal the rule.
Harper Neidig has the story here.
Finance: Sen. Ron Johnson (R-Wis.) on Thursday called on a federal watchdog to review the “flawed” process in which Leandra English jumped from a position as political appointee to serving as a senior career civil servant at the Consumer Financial Protection Bureau (CFPB).
Johnson, the head of the Senate Homeland Security and Governmental Affairs Committee, sent a letter to the head of the Office of Special Counsel (OSC), Henry Kerner, raising concerns about the conversion process in the final days of the Obama administration.
“Based on the information that [the Office of Personnel Management] provided to the Committee, it may be appropriate for the Office of Special Counsel to review whether the conversion of Ms. English from a political appointment at OPM to a career position within CFPB adhered to the merit system principles,” Johnson wrote.
Johnson’s letter comes after a showdown in November over dueling appointments between the White House and the outgoing CFPB head over who would lead the agency.
Exiting CFPB Director Richard Cordray, an Obama-era appointee, promoted English, his chief of staff, to deputy director — leaving her in a position to lead the agency after he departed. But President Trump appointed Mick Mulvaney — his White House budget chief – to lead the agency.
Sylvan Lane explains here.
Energy: A Democratic senator plans to use the Congressional Review Act (CRA) to block President Trump from overturning safety rules put in place after the Deepwater Horizon oil spill disaster in 2010.
Florida Sen. Bill Nelson (D) said on the Senate floor Wednesday that he will use the CRA, which Republicans have used to dismantle many Obama-era regulations under the Trump presidency, to block the administration’s proposed rule changes. The law allows for an expedited review to overturn a regulation by resolution.
“The BP spill devastated my state’s economy and 11 people lost their lives,” Nelson said in remarks reported by the Washington Examiner. “That’s why I plan to subject this misguided rule to the Congressional Review Act.”
One of the changes proposed by the Interior Department’s Bureau of Safety and Environmental Enforcement would reduce the authority of third-party safety inspectors to review documents related to oil rig operations and reduce the requirement that certified engineers review safety equipment plans to require the review of only the “most critical documents.”
John Bowden has more here.
Energy: Federal regulators under the Obama administration were inconsistent in how they processed applications to conduct seismic research for offshore oil and natural gas, the Government Accountability Office (GAO) found.
Auditors found in a report released Thursday that, depending on the regional office, the Interior Department’s Bureau of Ocean Energy Management (BOEM) took as much as 340 days to review seismic applications, or sometimes approved them the day they were complete.
Furthermore, the National Marine Fisheries Service (NMFS) and the Fish and Wildlife Service (FWS), which are responsible for reviewing seismic applications for compliance with wildlife laws, don’t have consistent standards for how to record the time they take to process applications, GAO said.
Timothy Cama has the details here.
IN OTHER NEWS
Trump administration seeks curb on student loan forgiveness – Wall Street Journal
As Europe’s ‘Mifid’ regulations roll out, bond volumes fall – The Wall Street Journal
Citibank fined $70 million for anti-money laundering compliance shortcomings – Reuters
OPINION: Sessions is targeting the cannabis community – it’s time for Congress to intervene