Resolution Disapproving DOL ESG Rule Passes House
A resolution for congressional disapproval of the Department of Labor’s rule “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights” passed the House in a 216-204 vote. A companion resolution has been introduced by Senator Mike Braun (R-IN) and requires a majority vote to pass the Senate. In the event the resolution passes the Senate, it is expected to be vetoed by President Biden. In that case, the final ESG rule —which generally became effective January 30, 2023— would continue to stand.
The Congressional Review Act (CRA) (5 U.S.C §§801-808) as explained by the Congressional Research Service, permits Congress to review and repeal rules issued by federal agencies by passage of a joint resolution by a simple majority of both the House and Senate and signature of the President. Successful passage of a resolution would invalidate a rule, and if already effective, would treat such rule as if it had never taken effect. A subsequent rule could not be reissued in substantially the same form. Only 20 rules have been overturned by the CRA since it became available in 1996.