On January 20, 2021, White House Chief of Staff Ron Klain issued a memorandum ordering a temporary freeze of new or pending rules in order “to ensure that the President’s appointees or designees have the opportunity” to review them. Despite such action being a now-routine feature of any new incoming administration, there remains much uncertainty about the scope of this regulatory moratorium, including whether the Klain Memorandum will have the effect of halting pending rules issued by independent agencies. Although historic precedent would suggest that the Klain Memorandum does not bind independent agencies, the memorandum itself is silent on the topic, and it remains unclear how independent agencies will respond to it.

This uncertainty has potentially serious consequences for the implementation of significant forthcoming regulations that affect entities in the securities, banking and lending industries. Ultimately, the applicability of the Biden Administration’s regulatory freeze to independent agencies likely will depend on how individual officials in key positions at those agencies decide to respond to it. WilmerHale will continue to closely monitor both the new administration and independent agencies.