Opinion on Whether the Farm Credit Administration's National Charter Initiative is a Rule Under the Congressional Review Act, B-286338, October 17, 2000

B-286338 Oct 17, 2000 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights GAO reviewed the Farm Credit Administration's (FCA) National Charter Initiative to determine whether the charter is a rule under the Congressional Review Act (CRA) and the Administrative Procedure Act (APA). FCA contends that its initiative is not a rule because it does not set out any rules or requirements for FCA institutions, but merely states how FCA will proceed with future chartering actions. FCA further contends that its accompanying booklet is exempt from CRA and APA regulations because the guidelines it outlines for national charter applications does not bind the agency nor is it enforceable against FCA institutions. A review of the actions of FCA and the contents of its booklet finds that FCA's booklet meets the requirements of a legislative rule and should be published for comment and submitted to Congress and GAO for review. View Decision Subject: Opinion on Whether the Farm Credit Administration's National Charter Initiative is a Rule Under the Congressional Review Act FILE: B-286338 Date: October 17, 2000 The Honorable James A. Leach Chairman, Committee on Banking and Financial Services House of Representatives Dear Mr. Chairman: This is in response to your letter of September 21, 2000, requesting our view as to whether the Farm Credit Administration's (FCA) national charter initiative is a "rule" under the Congressional Review Act (CRA) portion of the Small Business Regulatory Enforcement Fairness Act (SBREFA) (5 U.S.C. 801 et seq.) and whether the initiative should have been issued using the notice and comment rulemaking procedures contained in the Administrative Procedure Act (APA). 5 U.S.C. 553. The FCA is an independent agency responsible for examining and regulating the activities of the Farm Credit System (FCS), a nation-wide system of borrower-owned financial institutions operated as cooperatives. The FCA is currently in the process of accepting applications for national charters that would remove regulatory geographic barriers imposed on FCS institutions. Rules Subject to Congressional Review Chapter 8 of title 5, United States Code, entitled "Congressional Review of Agency Rulemaking," is designed to keep Congress informed about the rulemaking activities of federal agencies and to allow for congressional review of rules. The requirements of chapter 8 take precedence over any other provision of law. Section 801(a)(1) provides that before a rule becomes effective, the agency promulgating the rule must submit to each House of Congress and to the Comptroller General a report containing: "(i) a copy of the rule; (ii) a concise general statement relating to the rule, including whether it is a major rule; and (iii) the proposed effective date of the rule." On the date the report is submitted, the agency must also submit to the Comptroller General and make available to each House of Congress certain other documents, including a cost-benefit analysis, if any, and agency actions relevant to the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., the Unfunded Mandates Reform Act of 1995, 5 U.S.C. 202 et seq., and any other relevant information or requirements under any other legislation or any relevant executive orders. 5 U.S.C. 801(a)(1)(B)(I)-(iv). Once a rule, whether determined to be a major rule or not, is submitted in accordance with section 801(a)(1), special procedures for congressional consideration of a joint resolution of disapproval are available for a period of 60 session days in the Senate or 60 legislative days in the House. 5 U.S.C. 802. These time periods can be extended upon a congressional adjournment. 5 U.S.C. 801(d)(1). A major rule may not become effective until 60 days after it is submitted to Congress or published in the Federal Register, whichever is later. 5 U.S.C. 801(a)(3)(A). Section 804(3) provides that for purposes of chapter 8, with some exclusions, the term "rule" has the same meaning given the term in 5 U.S.C. 551(4), which defines rules subject to the Administrative Procedure Act (APA).