Saturday, November 23, 2013

Multiple Agencies Seek Comment on Flood Insurance Regulation Changes


The Office of the Comptroller of the Currency (“OCC”), Board of Governors of the Federal Reserve System (“Board”), Federal Deposit Insurance Corporation (“FDIC”), the Farm Credit Administration (“FCA”), and the National Credit Union Administration (“NCUA”) (collectively, the “Agencies”) seek input on proposed amendments to regulations on loans in “areas having special flood hazards” in order to apply provisions of the Biggert-Waters Flood Insurance Reform Act of 2012.”  In particular, this notice of proposed rulemaking would create requirements regarding the “escrow of flood insurance payments,” the receiving of “private flood insurance coverage,” and the “force-placement of flood insurance.”   In addition, the OCC and the FDIC propose to “integrate their flood insurance regulations . . . .”

Federal flood insurance statutes were revised by the Biggert-Waters Flood Insurance Reform Act of 2012 (the “Act”).  Two sections regarding the “escrow of flood insurance payments” and “acceptance of private flood insurance coverage” changed the Flood Disaster Protection Act (“FDPA”) that require the Agencies to issue implementing regulations.  This proposal revises regulations as follows:
  1. this proposal requires regulated lending institutions to escrow premiums and fees for flood insurance for any loans secured by residential improved real estate or a mobile home, unless the institutions qualify for the statutory exception;
  2. this proposal mandates regulated lending institutions accept private flood insurance that meets the statutory definition to satisfy the mandatory purchase requirement;
  3. this proposal includes new and revised sample notice forms and clauses;
  4. this proposal amends the force-placement of flood insurance provisions to clarify that a lender or its servicer has the authority to charge a borrower for the cost of flood insurance coverage commencing on the date on which the borrower's coverage lapsed or became insufficient;
  5. this proposal makes technical corrections; and
  6. the OCC and the FDIC propose to integrate their flood insurance regulations for national banks and Federal savings associations and for State non-member banks and State savings associations, respectively.

Interested parties are invited to comment specifically on the following:
  • whether the proposed collection of information is necessary for the proper performance of the Agencies’ functions; including whether the information has practical utility;
  • the accuracy of the Agencies’ estimate of the burden of the proposed information collection, including the cost of compliance;
  • ways to enhance the quality, utility, and clarity of the information to be collected; and
  • ways to minimize the burden of information collection on respondents, including through the use of automated collection techniques or other forms of information technology.

Comments should be submitted jointly to all of the Agencies, using the title “Loans in Areas Having Special Flood Hazards” by December 10, 2013 in one of the following ways:
  • Federal eRulemaking Portal:  http://www.regulations.gov  Enter “Docket ID OCC-2013-0015” in the Search Box and click “Search;”
  • Email: regs.comments@occ.treas.gov;
  • Mail: Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, 400 7th Street SW., Suite 3E-218, Mail Stop 9W-11, Washington, DC 20219;
  • Hand Delivery/Courier: 400 7th Street SW., Suite 3E-218, Mail Stop 9W-11, Washington, DC 20219; OR
  • Fax: (571) 465-4326.

Monday, November 18, 2013

Cost-Benefit Analysis & EO 12866: A Twenty-Year Retrospective - Part II

by Nina Hart

On October 28, 2013, New York University’s Institute for Policy Integrity hosted its Fifth Annual Cost-Benefit Analysis & Issue Advocacy Workshop.  One highlight was an afternoon panel reflecting on the consequences of Executive Order 12866 of 1993, which reaffirmed and expanded on the Reagan Administration’s requirement that significant executive agency regulations be subject to cost-benefit analysis.  The panel featured Boris Bershtyn, former Acting Director of OIRA (2011-13) and General Counsel for OMB (2012-13); Sally Katzen, former Director of OIRA (1993-98); C. Boyden Gray, former White House Counsel (1989-93); and E. Donald Elliott, former Assistant Administrator and General Counsel for the EPA (1989-91).  Richard Revesz, dean emeritus and professor at NYU School of Law, moderated the panel.  Notice and Comment is pleased to present series of posts by blogger Nina Hart on some of the critical issues discussed during the panel and key policy recommendations. 

Part II - OIRA’s Lack of Personnel Challenges its Capacity in terms of Numbers and Expertise

While many of the initial challenges discussed by the panelists were rooted in a sheer dearth in numbers, a related problem is, as Katzen put it, “uneven” expertise.  “I once had someone ask me what an aquifer was,” she admitted.  Bershtyn added that OIRA consists mostly of younger staffers in their 30s, which means they are often grappling with policy issues for the first time.  That said, Katzen and Bershtyn stressed that OIRA has always relied on other agencies and staffers within White House departments such as OMB, the Council of Economic Advisors, and the Office of Science & Technology Policy to fill the gaps.  While this has proven effective at providing OIRA with much-needed assistance, it is not an ideal solution.           

Bershtyn, Katzen, and Gray also stated that OIRA has suffered from “brain drain” due to pay freezes, furloughs, and the ongoing budget fights in Washington.  Gray said that he sees a role for OIRA in promoting greater and routine coordination on regulations between agencies, and this would be easy to solve without greater funding, notwithstanding the agency turf wars that might impede this goal.  As Gray noted, in the early days of the Bush Administration, the fights between the DOJ and DHS were “legendary,” often forcing officials to ask, “are we talking to each other today?”  Thus, if the ultimate hope is to deal with lack of expertise internally, then OIRA will require a much larger budget.

Friday, November 15, 2013

CFTC Proposes Rule Requiring Registered Futures Association Membership


The Commodity Futures Trading Commission (“Commission”) seeks comment on a proposed regulation amendment that would require “all persons registered” with the Commission as introducing brokers (“IBs”), commodity pool operators (“CPOs”), and commodity trading advisors (“CTAs”)” to join and maintain membership in “at least one registered futures association (“RFA”).”

The proposed amendment would remove existing gaps in regulatory oversight programs by the Commission and the National Futures Association (“NFA”).  In addition, it would advance the Commission’s goal to establish an oversight regime that “levels the playing field” by guaranteeing “consistent treatment of all its registered intermediaries . . . .”  Subject to Commission oversight, the NFA is the frontline regulator of its members and requiring membership in an RFA would allow the NFA to “ensure compliance” with Section 17 of the Commodity Exchange Act (“CEA”) . . . .”  Appropriate and effective implementation of programs required by Section 17 of the CEA could be obstructed without the membership mandate.  Thus, the Commission believes that “such membership is necessary . . . to ensure . . . market oversight . . . is applied consistently to all registered intermediaries.”

This proposed rule:
  • would give the Commission the ability to delegate particular oversight responsibility for intermediaries, including IBs, CPOs, and CTAs, to an RFA;
  • would facilitate more efficient use of agency resources;
  • would benefit the public by ensuring integrity of the swaps market and its participants; and
  • may lead to an increase in market participation.

The Commission seeks comment on all aspects of this proposed rulemaking, and has listed specific requests for comment including, but not limited to the following:
  1. Has the Commission accurately identified the benefits of this proposed regulation?
  2. Are there other benefits to the Commission, market participants, and/or the public that may result from the adoption of the proposed regulation that the Commission should consider?
  3. Should entities who are currently registered with the Commission but otherwise qualify for a Rule 4.14(a)(9) exemption be required to become members of NFA? If not, why?
  4. Will this proposal impact, positively or negatively, the risk management procedures or actions of intermediaries?
  5. Is the proposed collection of information necessary for the proper performance of the functions of the Commission?
  6. Is the Commission’s estimate of the burden of the proposed collection of information accurate?
  7. Are there ways to enhance the quality, utility, and clarity of the information to be collected?

Interested parties are invited to submit comments, identified by RIN number 3038-AE09, by January 17, 2014, by only one of the following methods:
  •  Mail, hand delivery or courier: Melissa D. Jurgens, Secretary of the Commission, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street NW., Washington, DC 20581;
  • Federal eRulemaking Portal: http://www.regulations.gov;
  • Fax: to the Office of Information and Regulatory Affairs at (202) 395-6566; or
  • Email: OIRAsubmissions@omb.eop.gov.

Tuesday, November 12, 2013

Cost-Benefit Analysis & EO 12866: A Twenty-Year Retrospective

by Nina Hart

On October 28, 2013, New York University’s Institute for Policy Integrity hosted its Fifth Annual Cost-Benefit Analysis & Issue Advocacy Workshop.  One highlight was an afternoon panel reflecting on the consequences of Executive Order 12866 of 1993, which reaffirmed and expanded on the Reagan Administration’s requirement that significant executive agency regulations be subject to cost-benefit analysis.  The panel featured Boris Bershtyn, former Acting Director of OIRA (2011-13) and General Counsel for OMB (2012-13); Sally Katzen, former Director of OIRA (1993-98); C. Boyden Gray, former White House Counsel (1989-93); and E. Donald Elliott, former Assistant Administrator and General Counsel for the EPA (1989-91).  Richard Revesz, dean emeritus and professor at NYU School of Law, moderated the panel.  Notice and Comment is pleased to present series of posts by blogger Nina Hart on some of the critical issues discussed during the panel and key policy recommendations. 

Cost-Benefit Analysis is Here to Stay, but OIRA Faces Resource Constraints that Challenge its Ability to Ensure that CBA Analysis is Performed
           
Revesz opened the panel by asking what surprised the panelists most about EO 12-866.  Katzen and Gray, both involved in drafting the Executive Order, each began by noting the Order’s durability.  Gray then moved on to a topic that framed much of the session: OIRA’s limited budget. 

To Gray, the limited budget and decrease over time in personnel indicated that the perceived entrenchment of CBA and large monitoring role for OIRA was “more fragile than it appears.”  It is unrealistic for OIRA to actively monitor each agency to ensure it has undertaken a thorough analysis of every regulation.  For example, Gray said, given the complicated economics behind HHS’s determination to narrowly define which insurance plans could be grandfathered into the Affordable Care Act regime, the regulation was likely promulgated absent thorough cost-benefit analysis.  Despite this fact, given OIRA’s scarce resources, it was unlikely that the Office could or did hold the agency to account.

Other consequences that result, at least in part, from what the panelists unanimously perceived to be an inadequate budget include:
  • Nearly all of the impetus to engage in rulemaking has shifted away from the White House to the agencies;
  • OIRA must balance its shortages against the fact that its role is both procedural (akin to “hard look review”) and substantive (evaluation of the CBA itself), and each role places different strains on its resources;
  • Undertaking the “regulatory lookback” imposed by President Obama becomes all the more necessary, but all the more difficult to complete.  It may be desirable to institute “Lookback 2.0” to ensure that this retroactive review of CBA is institutionalized.


Next week, we’ll analyze how personnel challenges impact OIRA’s ability to oversee the regulatory process.

Monday, November 11, 2013

Serving Our Veterans



If you are looking for ways to serve our nation's veterans, the American Bar Association encourages you to consider volunteering for one of the following military-assistance programs:

For more information, visit the American Bar Association website. The Section of Administrative Law and Regulatory Practice salutes our nations veterans!

Friday, November 8, 2013

Treasury Dept CDFI Fund to Require Non-Profit Financial Audits Not Reviews


The Department of Treasury’s, Community Development Financial Institutions (“CDFI”) Fund seeks comment on an interim rule requiring non-profit CDFI Fund awardees to submit audited (not merely reviewed) financial statements as part of their annual report to the CDFI Fund.

Empowering individuals, “unleashing the economic potential of small businesses,” establishing affordable housing, creating employment opportunities, and revitalizing communities, requires “[a]ccess to credit, investment capital, and financial services.”  The CDFI Fund (the “Fund”) was created as a “wholly owned government corporation by the Community Development Banking and Financial Institutions Act of 1994 (the “Act”) and placed within the Department of Treasury.  The Fund’s programs are intended to make possible the “flow of lending” and “investment capital” to underserved “communities and . . . individuals” who are not able to “take full advantage of the financial services industry.”

The long-term goal of the CDFI Fund (the “Fund”) is to “economically empower America's underserved and distressed communities” by boosting financial opportunity and encouraging “community development investments” for “underserved populations in the United States.”  Specifically, the CDFI Program (the “Program”) promotes “economic revitalization” and “community development” by helping and investing in CDFIs, which focus on serving “underserved markets . . . .” 

CDFIs are smaller and frequently have challenges in “raising the capital needed” to provide adequate services.  In order to improve the ability of CFIs to provide their products and services to the intended communities, the Fund gives them financial help, via “grants, loans, equity investments and deposits,” to CDFIs chosen through a “merit-based application process.”

Non-profit awardees of the Fund have time and expense challenges in obtaining “audited financial statements” within the required 180-day period after the end of their fiscal year.  Thus, current Program regulations allow non-profit CDFI awardees, as part of their annual report, to “submit financial statements” that are “reviewed,” and not “audited” by “independent certified public accounts.”

This interim rule, however, in order to conform to the requirements of the Act, proposes to amend CDFI Program rules and now require non-profit awardees to provide “audited financial statements within 180 days” after the end of their fiscal year end.  With this change, a mere review by an independent certified public accountant will no longer suffice for non-profit CDFI awardees.

Interested parties are invited to submit comments, addressed to the CDFI Program Manager, by December 30, 2013 by one of the following methods:
  • Electronic: (preferred method) http://www.regulations.gov
  • Email:  cdfihelp@cdfi.treas.gov
  • Fax: (202) 453-2466
  • Traditional mail: to the CDFI Program Manager, Community Development Financial Institutions Fund, Department of the Treasury, 1500 Pennsylvania Avenue NW., Washington, DC 20220.

Thursday, November 7, 2013

Section Administrative Law Conference 2013 Starts Today!


DC Buildings


Join the ABA Section of Administrative Law and Regulatory Practice for the Administrative Law Fall Conference, November 7-8, 2013 at the Georgetown University Hotel and Conference Center in Washington, DC. The conference will include CLE Panels on a wide-range of topics including Developments in Administrative Law Parts 1 and 2, Where Regulation and Innovation Converge, and the Centralization of Regulatory Power in the White House. Click here for the full meeting agenda and additional event details. Hope to see you there!

Tuesday, November 5, 2013

Meet Glen O. Robinson, Prof. Emeritus - University of Virginia School of Law

by Nina Hart

Meet Glen O. Robinson, Professor Emeritus at the University of Virginia School of Law.  Below, he discusses his unexpected path to a legal career that included a stint as a Commissioner for the FCC, and offers insights on the differences between practitioners and academics.

1. What led you to a career in law?

I drifted into it.  I majored in Government at Harvard, though mostly I studied literature and philosophy so it would be accurate to say simply that I was a liberal arts major who read Nietzsche and a lot of Russian novels.  In any case, I was not prepared for work in the real world.  However, I thought I could probably handle law and went off to Stanford to check it out.  It worked out ok.

2.  What experiences with administrative or regulatory law have you had?

My first experience was as a junior associate with Covington & Burling in Washington, D.C., where I helped broadcast clients deal with the Federal Communications Commission.  After several years of private practice, I embarked on an academic career at the University of Minnesota, where administrative law was my principal subject.  (With colleagues, I published a communications law casebook in 1974, which went through four editions before it succumbed to the lack of market demand.)

My teaching was briefly interrupted in the mid-1970s when I was appointed to the FCC, which gave me a new look at administrative/regulatory law from the inside.  (The difference between inside and outside perspectives did not substantially change my substantive views about most of the issues, however; most of them were antithetical to all the work that I did as a practitioner.)  After a short tenure at the FCC, I joined the University of Virginia faculty where I taught and wrote on a variety of subjects.  I continued to teach the basic administrative law course for another score years.  Eventually I lost interest in the basic course and developed a course in communications regulation, which I taught until retirement in 2008.  Communications law (more precisely the regulation of electronic communications) remains a keen interest.  In 2008, a colleague and I published a book on Communications Regulation; we are now finishing (forthcoming in 2014).

3.  How did you become interested in studying and teaching administrative law?

It was an accident.  When I joined Covington & Burling I was assigned to work with the communications law group.  I did not have any law school preparation for that work.  I had taken a course in administrative law, but I didn’t learn anything that proved useful to my practice.  So, more or less it was just a case of sink or swim.  I learned to float.  The interest in administrative regulation developed more fully when I went into teaching and it became a staple of my teaching and research for most of my career.

4.  How would you characterize the dialogue between academics and practitioners with regards to administrative law? Are there ways to improve how professors, agencies, and advocates work together to shape or change administrative law? Are there specific issues related to regulation development or review that you think warrant a greater degree of collaboration between academics and practitioners?

There isn’t all that much dialogue as a matter of routine teaching or practice. Obviously there is interaction in some forums where the two come together—as with ABA section activities.  But more generally, there is not that much occasion for collaboration.  Should there be more?  At a very general level the easy answer is yes.  At the next level down, the answer isn’t so easy. 

Start with the question whether practitioners can contribute to the classroom.  Everything depends on what is being taught.  I am skeptical of the value of inviting practitioners in for cameo appearances to address subjects to which their practice experience is of marginal importance.  Inviting a guest lecture to hold forth on the Chevron doctrine is rather pointless.  A practitioner who has argued countless agency appeals has no special insights into the verbal formulas used in applying the Chevron doctrine.  (Nor, for that matter, does the academic.)  On the other hand, if the subject is whether Chevron deference should be given for the FCC’s interpretation of a statute governing competitive access to local telephone networks, then having an experienced practitioner in the field of communications law to explain how network access works, what the policy implications are, etc. would be invaluable.  

On the flip side, can academics help practitioners?  Put aside using academics as consultants or expert witnesses on some subject within the latters’ special expertise.  I have done some consulting on specialized issues, but I never thought of it as a real collaboration of the kind the question seems to intend.  Thinking beyond this limited form of practitioner-academic collaboration the answer to the question depends on clarifying the purpose to be served.  Many years ago a number of major law firms adopted programs of having a scholar in residence.  I participated in one of those programs with the Washington office of a national law firm.  It was for a brief time—a week or two as I recall.  The firm was vague about what they expected me to do.  I had thought there might be some active consultation on matters of mutual interest, but that turned out not to be the case.  Apparently they conceived of the program as a special attraction for young associates who would think it cool to drop by my office and chat about legal matters of mutual interest.  However, the associates, like the partners, had better things to do-- chatting up a resident academic didn’t add a minute to their billable hours.  So, I gave a couple of informal lunch talks to groups of lawyers and then did my own work; that was it.  The lesson?  If there is one, it is that this kind of collaboration will not add value unless there is a well-defined objective and a schedule of work to be done.  Merely putting academics and practitioners together in the same space in the hope of generating an osmotic transfer of intellectual essence is a waste of time and money.

Specifically on the question of administrative law reform, well, on any subject it is plainly useful to have many minds working on the issues.  However, the question implies something more than bringing multiple minds together; it is about bringing together people with different perspectives.  So, that naturally invites the further question whether the respective participants have distinctive perspectives or information on the issues.  I don’t think I could answer that in the abstract without knowing what the issues are.  For example, if the question at hand is whether to have greater or less formalities for agency rulemaking proceeding I don’t think you could assume that an academic’s perspective on the formalities of rulemaking would be all that different from a practitioner’s.
           
5.  What do you think is the biggest challenge facing administrative law practitioners?

When I was a young practitioner my greatest challenge was overcoming boredom since much of my work was repetitious and often trivial.  But I don’t have any reason to think this is a greater problem for administrative law practitioners than for others. 

6.  For law students or new attorneys considering a career in administrative law, what do you think would be a good way of familiarizing themselves with the field?

I have never known anyone who practiced generic administrative law.  Law firms have specialists in, e.g., environmental law, food and drug law, securities regulation, trade regulation, communications law, etc.  I suppose you can loosely describe all these as “administrative law,” but they do not share enough commonality to call them a “field” for any practical purpose.  If someone asked me how to prepare for a career in administrative law I would tell them to think about the underlying issues that they think are interesting.  That will reveal at once what courses they should take in law school.  After they have graduated the surest way to gain familiarity is to practice for a while with an agency doing that kind of work.  This is likely to give a wider exposure to the subject than an entry-level position in a law firm, where there is a high probability of becoming indentured to some small corner of the field.

7.  Outside of the law, what are your favorite activities or hobbies?


Reading (but I no longer read much law), gardening (I tend about 9 acres of undisciplined plant life) and foreign travel (the more foreign the better).

Friday, November 1, 2013

USPS Seeks Comment on Proposed Price Adjustments and Other Changes


The United State Postal Service (“USPS”) filed a notice of price adjustments with the Postal Regulatory Commission (“PRC”) on September 26, 2013, proposing revisions that would be effective January 2014.  Even though the USPS is exempt from the notice and comment obligations of the Administrative Procedure Act concerning proposed rulemaking by 39 U.S. C. 410(a), the USPS is seeking public comments on proposed revisions to the Mailing Standards of the United States Postal Service, Domestic Mail Manual (“DMM”).  If the proposed changes are adopted, the USPS will publish an appropriate amendment to the Code of Federal Regulations.
The proposed changes include new pricing eligibility for retail and commercial nonpresorted First-Class Mail® letters, several mail classification changes, and some condensing of current standards for Periodicals publications.”

Proposed changes include:
  • Adding a new single-piece commercial nonpresorted First-Class Mail letter price category to be called Metered Mail price and changing the current price structure for residual First-Class Mail letters;
  • Disallowing the use of detached address labels (DALs) with all Standard Mail flats mailed with simplified addresses (EDDM®), thus, all EDDM flats would have to bear simplified addresses directly on the flats;
  • Adding a restriction on all tray and sack labels to formalize a restriction (that all tray and sack labels be non-adhesive) in order to enable quicker turnaround of empty sacks and trays for customer use;
  • Requiring all shipments containing mailable live animals to be assessed a Live Animal Transportation Fee;
  • Removing the current option for senders of nursery stock shipped Collect on Delivery (COD) to include special instructions for undeliverable shipments to be auctioned off to the highest bidder and the proceeds remitted to the sender;
  • Expanding the standards for COD mail to allow Hold for Pick Up service to be added when COD mail is sent as Priority Mail, First-Class Package Service, or Parcel Select Nonpresort; and
  • Clarifying that the use of a hand stamp is not exclusive to the Form 3849.

Interested parties should submit comments, referencing Docket No. R2013-10, by November 25, 2013 by the following method:
  • Mail or deliver written comments to: The Manager, Product Classification, U.S. Postal Service®, 475 L'Enfant Plaza SW., Room 4446, Washington, DC, 20260-5015.
  • NOTE: Faxed comments will not be accepted.