On March 31, Senator Patrick Toomey (R-Pa.) sent a letter to the Government Accountability Office (GAO) requesting that the GAO determine whether the Guidance on Leveraged Lending jointly issued in 2013 by the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation constitutes a “rule” for the purpose of the Congressional Review Act, not simply guidance. If the Leveraged Lending Guidance is a rule under the Congressional Review Act, Congress should have been permitted the right to disapprove the guidance within 60 days of its being finalized. Senator Toomey is requesting the GAO ruling in order to require that the Leveraged Lending Guidance be resubmitted to the current Congress for review.

Given current Republican control of Congress, if Senator Toomey succeeds in getting the Leveraged Lending Guidance recharacterized as a rule, it is quite possible (perhaps even likely) the guidance would be invalidated. While the full implications of invalidation are uncertain, it is likely that the onerous restrictions on and regulatory interference with leveraged lending by the regulated banks endured since 2013 would ease dramatically.

Senator Toomey has requested a response from the GAO by June 1.