GAO Sets the Stage for Congress to Invalidate or Replace the Leveraged Lending Guidance

By: V. Gerard Comizio, Nathan S. Brownback

On October 19, 2017, the Government Accountability Office (“GAO”), in response to an inquiry from Senator Pat Toomey (R-PA), determined that the Interagency Leveraged Lending Guidance (“ILLG”) issued by three federal banking agencies, the Board of Governors of the Federal Reserve System (“FRB”), Federal Deposit Insurance Corporation (“FDIC”) and Office of the Comptroller of the Currency (“OCC”) (collectively, the “Agencies”), is a “rule” for purposes of the Congressional Review Act (“CRA”). This determination gives Congress the right to review the ILLG and issue a joint resolution for signature by the President disapproving it. To date, the Agencies have not publicly or formally responded to the GAO Determination Letter and have not indicated their intention or plans to amend, change or reissue the ILLG.

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