Don't Change Your Compliance Strategies Just Yet, Experts Say
The election of Donald Trump in November means that government regulatory programs could undergo a massive shift in the near future, as industries are deregulated, government enforcement priorities are shifted, and federal rules are rolled back.
But don't expect things to change instantly come Inauguration Day. When it comes to your compliance regime, the best strategy is to stay the course, according to experts.
Rolling Back the Regulatory State Takes Time
President-elect Trump has promised to eliminate two federal regulations for every new regulation created. He's vowed to review existing federal rules and toss those his administration disagrees with. With a Republican-controlled Congress, it's likely that some signature Obama-era laws, such as Dodd-Frank and the Affordable Care Act, will see drastic revision, if not full repeals.
Much of that won't happen on day one, however, or even on day 100.
When it comes to administrative laws, repealing regulations would require a new notice and comment rule-making process, "the same process that's used to develop a new regulation and that would take at least a year," according to Susan Dudley, head of the Regulatory Studies Center at George Washington University, who discussed the Trump transition with NPR recently.
The Congressional Review Act allows Congress to vote to overturn administrative regulations, but only those adopted within the last 60 days, meaning that most regulations will be out of the Act's reach. Even those that could be overturned by a majority vote will have to contend with more pressing matters, like spending bills and administration nominations.
There are some things a Trump administration can accomplish quickly, however. New agency heads could set new enforcement priorities and a host of executive orders, one of President Obama's main governance tools, could be reversed. (The Daily Caller has compiled a list here.) But for the biggest items, change will take time.
Keep Doing What You're Doing -- and Maybe More in the Future
While that plays out, businesses are advised to continue their compliance efforts. "What we can be sure of is that there will still be plenty of conduct risk to go around," Scott Killingsworth, an attorney at Bryan Cave, recently told the Wall Street Journal. That continuing risk "argues for continued investment in compliance."
In fact, reduced regulations could actually increase compliance risks, according to Donna Boehme, of Compliance Strategies LLC. Fewer regulations in financial services and the environment "will probably create even more work for compliance," she says, as companies attempt to address new uncertainties.
And some enforcement could shift from the federal governments to the states and private litigants, says Killingsworth, "both of whom are fully conscious of the potential to collect enormous fines and damage awards."
"There is no reason to believe these players will leave the game," he says.
- What's Next for Compliance Under President Trump? (Compliance Week)
- 5 Employment Laws That Could Disappear Under Trump (FindLaw's In House)
- With Mary Jo White Out of the SEC, Is Dodd-Frank Done? (FindLaw's In House)
- With New Overtime Rules on Hold, What Comes Next? (FindLaw's In House)