Overnight Regulation: Treasury slams consumer bureau’s arbitration rule | EPA considers repealing truck emissions rule | GOP senators offer wildfire management bill
Welcome to Overnight Regulation, your daily rundown of news from the federal agencies, Capitol Hill, the courts and beyond. It’s Monday evening and both the House and Senate are in session after alternating weeks in recess.
THE BIG STORY: The Treasury Department on Monday criticized the Consumer Financial Protection Bureau’s (CFPB) rule on arbitration, claiming it would impose “extraordinary costs” with little justification.
In a report released Monday morning, the department argued that CFPB failed to consider cheaper, more effective options for consumers than the controversial rule.
The report argues that the rule, meant to prevent financial services companies from blocking class-action lawsuits against them, would lead to 3,000 more suits over the next five years. The department claims those class-actions suits would impose more than $500 million in legal defense fees, giving $330 million to plaintiffs’ lawyers.
“The Bureau’s Rule would upend a century of federal policy favoring freedom of contract to provide for low-cost dispute resolution,” the report states.
“An agency implementing such a drastic shift in policy should typically subject its rulemaking to the rigors of cost-benefit analysis and require incremental efficiency justification for more stringent regulations.”
Critics of the CFPB rule say it limits cheaper options for both customers and businesses, benefiting trial lawyers instead of consumers.
But supporters say the arbitration rule protects vulnerable consumers from being defrauded by companies without a chance to hold them accountable in court.
The Treasury report is only the latest shot at the rule from Trump administration regulators and comes as GOP lawmakers are attempting to repeal it through the Congressional Review Act.
Sylvan Lane has the details here.
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The Senate Banking Committee holds a hearing on Trump nominees. The panel will consider Hester Maria Peirce and Robert J Jackson, Jr. to be members of the Securities and Exchange Commission, and David Ryder to be director of the U.S. Mint.
The House Financial Services Committee holds a hearing on “The Federal Government’s Role in the Insurance Industry.”
House Oversight subcommittees meet to hear from their regulatory reform task forces.
The House Oversight Subcommittee on Information Technology holds a hearing on tightening rules on disclosures for online political ads.
Bloomberg is hosting an event on tech policy, “Next: The Connected Future.”
REG ROUNDUP
Mergers: AT&T and Time Warner are extending the deadline for their pending merger as they wait for approval from regulators at the Department of Justice (DOJ).
Both companies agreed to an extension “for a short period of time to facilitate obtaining final regulatory approval required to close the merger,” according to a filing AT&T made with the Securities and Exchange Commission on Monday.
The $85 billion deal had received approval on Wednesday from Brazil, one of the last countries AT&T and Time Warner need to complete the deal. The deal has already been cleared by regulators in Mexico, Chile and Europe.
AT&T still expects the deal to be completed by the end of the year but is waiting to receive clearance from the DOJ. Experts say the agency is likely to approve the deal, citing its tendency to clear vertical mergers between companies in different industries.
The $85 billion deal would see AT&T one of the nation’s telecommunications powerhouses buy Time Warner, an entertainment giant, that includes channels HBO and CNN, and studio Warner Bros.
Wildfires: Four Republican senators unveiled draft legislation Monday aimed at preventing and mitigating wildfires by making it easier to cut down and remove trees and brush.
The legislation from Sens. John Barrasso (Wyo.), Orrin Hatch (Utah), John Thune (S.D.) and Steve Daines (Mont.) comes amid a particularly destructive wildfire season in the West, which has led to unprecedented federal aid and congressional attention.
The GOP bill contrasts with a bipartisan wildfire management bill that a handful of senators introduced last week.
The bill from Barrasso and his colleagues focuses primarily on trying to make it easier to remove wood and brush from forests. Republicans have long complained that land management agencies like the Forest Service have to go through the arduous process of consulting with the Fish and Wildlife Service to allow logging in areas where endangered species live or are nearby. That delays the process of removing wood and brush that contributes to fires.
Provisions of the bill would reduce the obligations of the Forest Service to consult with the Fish and Wildlife Service, direct the Forest Service and Interior Department to create certain exclusions from environmental review for wood and brush removal, call for streamlined environmental reviews for Forest Service restoration projects and test out an arbitration process for groups to challenge permits.
Truck emissions: The Trump administration is considering repealing an Environmental Protection Agency (EPA) rule limiting emissions from truck components.
According to an Office of Management and Budget notice, the EPA is formally proposing to repeal the rule, something EPA Administrator Scott Pruitt said in August he would do.
The regulation, an Obama administration effort to cut climate change-causing emissions from the transportation sector, aims to limit pollution from trucks.
The rule applies to gliders, which are medium- and heavy-duty trucks assembled using refurbished powertrains and new truck parts called “glider kits,” which are also subject to the regulation. Obama’s EPA aimed to apply emissions standards for new motor vehicles and engines to the refurbished gliders.
But industry groups and the manufacturing sector oppose the rule, saying it would hurt producers and “effectively destroy the glider industry,” manufacturers wrote in a petition with the EPA in July.
Hot air balloons: A bipartisan group of Texas lawmakers unveiled legislation on Monday designed to make hot air balloon operations safer in the wake of a deadly crash in Texas last year.
Reps. Lloyd Doggett (D-Texas), Blake Farenthold (R-Texas) and Will Hurd (R-Texas) introduced a measure that would mandate that the Federal Aviation Administration (FAA) require medical certifications for commercial balloon pilots.
“Because the FAA has failed to act, I am taking action to ensure no more families risk injury or death from unsafe hot-air balloon pilots,” Doggett said a statement.
“The FAA should not delegate its responsibility for public safety to a private lobbying group upon which it has thus far relied. Delay risks further disasters. No more balloon tragedies should be required to justify the reasonable safety measures we need,” he continued.
Efforts to reform how the hot air balloon industry is regulated have picked up steam since the worst hot air balloon disaster in U.S. history, when a balloon crash left 16 people dead last year.
Alfred Nichols, the lone operator of a small hot air balloon company, was piloting a hot air balloon in unsafe weather conditions near Lockhart, Texas, last summer when he struck high-voltage power lines and plunged into a rural field.
The National Transportation Safety Board (NTSB), which held a hearing in Washington last week to discuss its investigation’s findings, released a scathing report ripping the FAA over the fatal crash.
Retirement savings: President Trump on Monday tweeted that changes won’t be made to 401(k) plans after reports that congressional Republicans were considering a major alteration to the retirement accounts in forthcoming tax-reform legislation.
“There will be NO change to your 401(k),” Trump tweeted. “This has always been a great and popular middle class tax break that works, and it stays!”
Financial industry stakeholders had heard that lawmakers are considering significantly reducing the amount that people can put into 401(k)s on a pretax basis.
Children’s health care: Disagreements over how to pay for an extension of the Children’s Health Insurance Program (CHIP) could result in a partisan bill reaching the House floor as soon as this week, a top House Democrat said Monday.
Rep. Frank Pallone Jr. (D-N.J.), the ranking member on the House Energy and Commerce Committee, said Republicans are insisting that the extension is paid for by cutting other health programs, adding that the bill could get a floor vote in the House on Thursday.
Representatives for House Majority Leader Kevin McCarthy (R-Calif.) did not respond to a request to confirm the schedule.
The proposed legislation would extend funding for CHIP for five years while phasing out ObamaCare’s funding boost to the program. It would also extend funding for community health centers for two years, and provide $1 billion to help with Puerto Rico’s looming Medicaid crisis.
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