White House Announces Regulatory Freeze And Review Of Rules

White House Chief of Staff Ron Klain issued a memo on Wednesday instructing executive department and agency heads to put a hold on recently-issued rules and regulations and to refrain from issuing new ones without getting the go-ahead from the new team.

Klain said that department heads should consider postponing the effective dates of already-published rules for 60 days, and that they shouldn't issue new rules until they're reviewed by a department or agency head that was appointed after President Joseph R. Biden Jr. took office on Wednesday.

Once such already published rule is the Department of Labor's investment advice rule, published Dec. 16.

The Trump administration rule has two main parts: a new prohibited transaction exemption allowing advisors to provide conflicted advice for commissions; and a reinstatement of the "five-part test" from 1975 to determine what constitutes investment advice.

It is a successor rule to the unpopular fiduciary rule published by the Obama administration, which was later tossed out by a federal appeals court. The Trump rule can be withdrawn by the Biden administration, but it carries the force of law 60 days after its publication.

Klain said that he reserved the right to modify the instructions if staffers discovered that the outgoing Trump administration tried to gum up the works on their way out the door.

"Should actions be identified that were undertaken before noon on January 20, 2021, to frustrate the purpose underlying this memorandum, I may modify or extend this memorandum, pursuant to the direction of the President, to request that agency heads consider taking steps to address those actions," he said.

The freeze is standard for new administrations to try to wipe the slate clean, if necessary, of late actions of the prior administration.