ICR D.C. Insider: July 2023


In the July 2023 edition of The ICR D.C. Insider, we share our insights and analysis about developments in Washington that could have an immediate and long-term impact on your business.

What’s Next In Washington

With the lengthy Senate and House summer recess on the horizon, the next series of significant congressional actions are not likely to occur until after Labor Day when rhetoric around the Federal Government’s FY 2023 budget will escalate. Nevertheless, significant issues will continue to occupy committees and members alike, including:

  • China – Treasury Secretary Janet Yellen’s visit to China coincided with reports the Biden Administration is weighing new restrictions on exports of artificial intelligence chips to China and may also restrict the leasing of cloud services to Chinese AI companies. Yellen’s diplomacy and the Administration’s simultaneous saber-rattling show how the Biden campaign is positioning itself for the 2024 election. In Congress, the Chairman of the Select Committee on the Chinese Communist Party Mike Gallagher (R-Wisc.), and the Chairman of the House Oversight & Accountability Committee, James Comer (R-Ky.) sent a letter to U.S. Postal Service (USPS) Postmaster General Louis DeJoy taking aim at Chinese companies for leveraging “the de minimis threshold” of $800 per package as a way to avoid scrutiny of the products’ origins and the possibility that they were made with forced labor.
    • Bill Cassidy (R-La.) and Tammy Baldwin (D-Wisc.), both of whom are members of the Senate Finance Committee, introduced The De Minimis Reciprocity Act to bar Chinese exports from entry via the expedited ‘de minimis’ channel and lower the threshold for duty-free imports to equal U.S. trading partners.


  • The Supreme Court Tees-Up A Major Case – Before adjourning for the summer, the Supreme Court agreed to consider the legality of the Securities and Exchange Commission’s (SEC) use of its in-house tribunals, setting up a decision next term that could alter how U.S. securities laws are enforced. In an order, the high court said it would hear the Biden Administration’s appeal of a May 2022 lower-court ruling that found it unconstitutional for the SEC to bring enforcement actions seeking financial penalties through its Administrative Law Judges (ALJs).
  • Final SPAC Rules Expected In Fall 2023 – The White House Office of Information and Regulatory Affairs released its Spring 2023 Unified Agenda of Regulatory and Deregulatory Actions which indicates the finalization of the new SPAC rules in the Fall of 2023.
  • House Republicans Float Prospect of Budget Cuts – In anewly released fiscal 2024 spending bill, House Republicans proposed slashing the SEC’s funding to $2 billion, a nearly $150 million cut from the current year, and prohibit the Commission from pursuing several planned regulations, including climate risk disclosures and a sweeping revamp of stock trading. It will likely amount to nothing more than a messaging and lobbying exercise. Democrats are pledging to fight the funding bill, which also covers the Treasury Department, the IRS, and the judiciary.
  • Final Rule on Cyber Incident Disclosure Delayed – The Commission has postponed until October a final rule that would require publicly traded companies to report material cyber breaches and attacks within four days of determining whether a cyber breach is material. The rule proposal also seeks additional disclosures from companies regarding their cyber governance, including board expertise and upper management involvement in cyber risk.
  • Republican Senators Propose Bill to Narrow Proposed SEC Rules – Mike Rounds (R-S.D.) and nine other Republican senators reintroduced the Mandatory Materiality Requirement Act would only allow the SEC to impose future disclosure requirements if the information is important for investors’ decisions, in a direct challenge to the SEC’s proposed climate disclosure rules. Rep. Bill Huizenga (R-Mich.) introduced the companion to this legislation in the House of Representatives.


  • New Guidelines For Endorsements, Influencers, & Product Reviews – The Federal Trade Commission (FTC) issued a long-anticipated update to its guidelines for endorsements, which advise businesses about how to make sure consumers understand when celebrities, influencers, or even regular consumers are compensated to promote or review their products. Some marketers and influencers will now need to go beyond using hashtags such as “#ad” in social media.
  • Rule Banning Fake Reviews & Testimonials Proposed – The FTC proposed a new rule that would stop marketers from using illicit review and endorsement practices such as using fake reviews, suppressing honest negative reviews, and paying for positive reviews.
  • Public Input on State AG Collaboration Sought – The Commission voted 3-0 to issue a request for public information (RFI) seeking public comments and suggestions on ways it can work more effectively with state attorneys general to help educate consumers about, and protect them from, potential fraud.
  • New Pre-Merger Requirements Proposed – The FTC proposed changes to the premerger notification form, associated instructions, and the premerger notification rules implementing the Hart-Scott-Rodino (HSR) Act. They would require companies to file more detailed information with the FTC and the DOJ about the parties involved, their respective markets, and how the businesses operate ahead of an initial 30-day assessment period. These changes would put in place additional hurdles for acquisitions, especially for private equity buyers. Companies would have to provide all drafts of their deal documents; detailed workforce reports to identify whether there is significant overlap between the two parties; acquisitions in the past 10 years; list their creditors, minority shareholders, non-controlling entities and certain other interest holders that may exert influence; as well as officers, directors, and board observers.


  • Supreme Court to Review Agency Funding Structure – The Supreme Court agreed to hear in its coming term a challenge to the constitutionality of the funding structure for the Consumer Financial Protection Bureau (CFPB). This could lead to the legality of the agency’s findings being questioned if the court finds the agency is funded unconstitutionally.
  • Consumer Data Rights Proposal Expected This Fall – A long-awaited proposal from the CFPB on consumer data rights is slated for release in October. Banks and financial technology companies have been awaiting more specific guardrails from the CFPB as various industries wrangle over who gets access to people’s financial data and what type of protections the data should be subject to. CFPB Director Rohit Chopra said he expects to finalize the rule in 2024.


  • ESG in The Crosshairs – After months of threats, House Republicans are casting July as “ESG Month” and plan to pummel major financial institutions with hearings and bills designed to discourage climate- and social-investing practices. A big initial focus will be showcasing ways to stop activists from forcing companies to take positions on environmental issues via the shareholder voting process. Republicans will pitch greater oversight of the biggest asset management firms – BlackRock, Vanguard and State Street – as well as the two big proxy advisors, ISS and Glass Lewis, which issue recommendations on shareholder votes. The House Financial Services Committee plans to vote on anti-ESG bills around the end of the month.
    • Andy Barr (R-Ky.) and Rick Allen (R-Ga.) reintroduced the Ensuring Sound Guidance (ESG) Act that would require investment advisers and ERISA retirement plan sponsors to prioritize financial returns over non-pecuniary factors when making investment decisions on behalf of their clients.
  • Diversity Disclosure Bill Introduced – Rep. Gregory Meeks (D-N.Y.) and Sen. Bob Menendez (D-N.J.) have reintroduced the Improving Corporate Governance Through Diversity Act, which would require publicly listed companies to disclose the gender, racial, and ethnic composition of their directors and executives. Starting 18 months after the bill’s passage and continuing every year thereafter, the SEC would issue a report to Congress identifying trends in corporate diversity.

Additional Key Developments

  • Labor Department – President Biden was urged by 33 Republican senators to withdraw the nomination of Deputy Labor Secretary Julie Su to become Secretary. At the same time it was reported that the Congressional Progressive Caucus (CPC) recently paused its push for a White House executive order to raise the overtime threshold while Su’s nomination is pending, in an effort to minimize controversy.
  • NLRB – The National Labor Relations Board overturned a ruling made when the board was under Republican control and this ruling makes workers more likely to be considered employees rather than contractors under federal law.
  • Justice Department – The Department launched a corporate crime database, which for the first time aggregates all the cases and enforcement actions related to corporate wrongdoing. The database comes after a trio of Democratic lawmakers last year pushed the Justice Department to create such a resource, arguing that it would help strengthen law enforcement and provide benefits for researchers and the public.
  • PCAOB – The Public Company Accounting Oversight Board (PCAOB) wants auditors to take a more proactive role in flagging potential fraud to clients, requiring them to identify areas of noncompliance that could have a material impact on companies’ financial statements.
  • China – Key developments include:
    • A bipartisan and bicameral coterie introduced The Level the Playing Field 2.0 Act that would strengthen U.S. trade remedy laws and ensure they remain effective tools to fight back against unfair trade practices and protect American workers. The new bill would help the Commerce Department pursue the problem of successive investigations when a company is accused of evading U.S. trade rules by moving production to new countries. The legislation would also broaden Commerce’s powers to investigate cross-border subsidies like those arguably employed by China under its Belt and Road Initiative.
    • The Biden Administration plans to allow top semiconductor manufacturers from South Korea and Taiwan to maintain and expand their existing chip-making operations in China without U.S. reprisals, according to the Undersecretary of Commerce for Industry and Security.
    • The Department of Homeland Security blocked the import of goods made by Chinese laser printer maker Ninestar, majority owner of U.S.-based Lexmark International, over the company’s alleged use of forced labor tied to China’s Xinjiang region and the Uyghurs.
    • Michael Bennet (D-Co.), Mark Warner (D-Va.) and Todd Young (R-Ind.) introduced a bipartisan bill, The Global Technology Leadership Act, that would increase U.S. competitiveness in emerging technologies. The measure would create the Office of Global Competition Analysis to compare U.S. technological advancement to competitors such as China.