Federal regulations have the ability to significantly impact a trade association’s membership and its industries. As the federal government considers and adopts new regulations, a public rulemaking process allows trade associations a key opportunity to represent members and participate as important decisions are being made. The federal regulatory rulemaking process is a complex and structured system that federal agencies follow to develop, amend, or repeal regulations, and this process consists of three key stages – announcing rulemaking actions, developing proposed rules, and issuing financial regulations. For trade associations, understanding the rulemaking process is essential to ensuring that the interests of their membership are well-represented and protected as regulations are proposed and implemented. This will also help associations to raise industry awareness that can help members prepare for future compliance.
Announcing rulemaking actions
Federal agencies, which are responsible for implementing and enforcing laws, will typically identify the need for new regulations or changes to existing ones as the first step in the rulemaking process. In some instances, factors such as new legislation or court decisions can require regulatory attention that triggers the initiation of rulemaking. In other cases, federal agencies may have the discretion to propose new regulations based on their expertise and assessment of current conditions.
Agencies are required to publish a regulatory agenda that outlines their planned rulemaking activities. This agenda provides advanced notice about upcoming regulatory actions, allowing stakeholders— including trade associations—to prepare for potential changes. This may involve soliciting comments from the public and holding hearings to understand the potential impacts of regulatory changes that are under consideration.
Developing proposed rules
The second stage of the rulemaking process involves the development of a proposed rule, its official publication in the Federal Register that serves as a public notice, and the initiation of a public comment period that encourages stakeholder engagement. This stage sets the groundwork for the agency to refine and finalize a proposed rule based on feedback and analysis from industry stakeholders, including trade associations.
After identifying the need for a new regulation, a federal agency publishes a Notice of Proposed Rulemaking (NPRM) in the Federal Register, which is the official daily publication for federal rules, proposed rules, and notices. The NPRM serves as an official announcement to the public, signaling the agency's intention to implement a new regulation or amend an existing one. By actively monitoring the Federal Register and NPRMs released by federal agencies, trade associations can engage in advocacy efforts to educate their members about the potential impact of proposed regulations on their industries and develop a strategy in response.
After the NPRM is released, a federal agency then begins drafting a proposed rule that details the specific provisions, requirements, and standards that the regulation would impose. For trade associations, a crucial aspect of this stage is the public comment period. This is a designated timeframe (typically 90 days) during which trade associations and other stakeholders can submit comments, feedback, and suggestions on the proposed rule as it is being developed.
Trade associations should actively participate in these periods by submitting well-crafted comments that articulate the concerns and perspectives of their members, which in turn can influence regulatory decisions. Comments may include suggestions for changes, additional data or evidence, concerns about the impact of the proposed rule, or legal arguments. Federal agencies will use this input while developing and publishing a proposed rule, which will formally outline the agency's intentions and the regulatory framework it aims to establish.
Based on the feedback received during the comment period both before and after a proposed rule is published, an agency may choose to revise a proposed rule in various ways that significantly benefit a trade association’s membership. Revisions may range from minor adjustments to substantial changes in response to concerns or new information provided during the comment period.
Issuing financial regulations
The final stage of the rulemaking process involves issuing financial regulations, where a federal agency will issue a final rule after reviewing the public feedback it received during the notice and comment periods. The agency is also required to provide a detailed analysis and justification for its decisions in the final rule, including addressing significant comments, explaining the basis for any changes made, and demonstrating how the final rule addresses the concerns raised during the comment period.
Once the final rule is issued, it is published in the Federal Register. The publication includes the full text of the final rule, responses to significant comments the agency received, any supporting documents or analysis, and an official date that the rule becomes effective. This may also include guidance on compliance, enforcement procedures, and any additional information relevant to the implementation of the rule. Post-issuing, a trade association should thoroughly review the final rule to understand its implications and requirements, identify key provisions that may impact the industry or association's members, and communicate the details of the final rule to association members—including providing guidance on compliance strategies, interpreting complex regulatory language, and providing updates on any changes that may impact member operations.
Trade associations play a pivotal role in identifying and monitoring regulatory topics that may impact their membership. By staying informed about legislative initiatives, monitoring government agendas, and actively participating in industry forums, trade associations can pinpoint issues that require attention and prepare for active engagement in the regulatory process.