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Catch a fish by its tail: has Senator Pat Toomey hooked the U.S. Leveraged Loans Guidance?

31 October 2017

Hogan Lovells
What has the U.S. Fish and Wildlife Service got in common with the U.S. banking agencies [1]?  Simple: the U.S. Government Accountability Office (the "GAO"), which investigates financial matters on behalf of Congress, has opined that both have wrongly published general statements of policy which are in fact rules under the Congressional Review Act (the "CRA").

The GAO issued an opinion on 19 October 2017 that the Leveraged Lending Guidance (“LLG”) [2] is a rule subject to the requirements of the CRA, meaning that it should have been submitted to each House of Congress before it was implemented, and opening the door for the possibility of it being overturned. This is notwithstanding that the LLG explicitly states that it is not a rule – the GAO has reiterated that an agency's characterization is not determinative of whether it is a rule under the CRA, and the LLG does not meet any of the CRA exceptions.

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