Trump Executive Order Expands Authorities Over Independent Agencies, Mandates Presidential Review for Proposed Regulations
Last week, President Trump signed an executive order expanding his authority over independent agencies like the Federal Reserve, the Securities and Exchange Commission (SEC), and the Federal Trade Commission (FTC). The order requires agencies to submit “significant” regulations for review to a unit in the Office of Management and Budget (OMB), led by Russell Vought.
“These regulatory agencies currently exercise substantial executive authority without sufficient accountability to the President, and through him, to the American people,” the order said. “Moreover, these regulatory agencies have been permitted to promulgate significant regulations without review by the President.”
The executive order cited Article II of the U.S. Constitution, stressing that independent agencies should not be exempt from executive supervision and should align with the Trump administration’s authorities. Consumer Finance and Fintech Blog highlighted that although the order applies broadly to independent agencies, it specifically exempts the Fed’s monetary policy functions.
The agencies are required to employ a White House liaison and regularly consult with the OMB, the White House Domestic Policy Council, and the White House National Economic Council on policy and priorities. The President and Attorney General will also interpret the law to prevent the agencies from enacting conflicting legal positions.
Kathryn Judge, a Columbia University professor of law, said that legal challenges to the order are “almost certain.” However, she noted that the outcome of any litigation is unclear, as the judiciary has adopted an exhaustive and expansive view of both the executive branch and executive authority.
“How much of the modern independent regulatory system survives the Trump Administration’s efforts at consolidation is anyone’s guess,” said Peter Conti-Brown, a professor of financial regulation at the University of Pennsylvania’s Wharton School.
