New SAFE Guidance Act Demands Financial Agencies Label Advice: 'Not the Law'

The Stop Agency Fiat Enforcement of Guidance Act—or the SAFE Guidance Act—is a bill focused squarely on how major federal financial agencies communicate with the banks, lenders, and exchanges they regulate. Essentially, this bill says that when agencies like the SEC, FDIC, or the Federal Reserve issue "guidance"—which is basically their official advice or interpretation—they have to slap a big warning label on it.

The Warning Label: What's Really Binding?

Starting immediately upon enactment, the bill mandates that nine major financial agencies must include a clear "guidance clarity statement" right on the first page of any new guidance document. This isn't just a suggestion; it’s a required, front-and-center disclaimer. The statement must communicate two critical things: first, the guidance itself does not have the force of law and doesn't create new rights or obligations. Second, if the guidance suggests a specific way for a regulated business to comply with an existing law, failing to follow that exact suggestion doesn't automatically mean the business is breaking the actual law.

Think about it like this: If your company's HR department sends out an email suggesting the best way to fill out a new expense report form, that email is just advice. The actual company policy is the binding document. This bill forces the government to make that distinction clear. For example, if the Office of the Comptroller of the Currency (OCC) issues guidance on best practices for managing cyber risk, the guidance might suggest a specific software protocol. Under the SAFE Guidance Act, the OCC must clarify that while the existing law requires banks to manage cyber risk responsibly, not using that specific protocol isn’t automatically a violation of the law.

Cutting Through the Regulatory Fog

For anyone running a business, especially in the highly regulated financial sector—from a small credit union to a large investment firm—this clarity is huge. Historically, agency guidance, while technically non-binding, often carried the weight of law because regulated parties feared being penalized if they deviated from the agency’s preferred method. This created a kind of regulatory gray area where agencies could effectively create new requirements without going through the formal, public, and often lengthy rulemaking process (like those under section 553 of title 5, U.S. Code). The SAFE Guidance Act aims to close that loophole by forcing the agencies to be upfront about the legal status of their advice.

This doesn't mean agencies can't give advice anymore, nor does it mean existing laws disappear. It simply reinforces the principle that only formal rules—the ones that go through public comment and review—are truly binding. The bill applies to a long list of powerful players, including the Bureau of Consumer Financial Protection (CFPB), the Department of the Treasury, the Federal Deposit Insurance Corporation (FDIC), the SEC, and others. It specifically defines "guidance" as a formal statement intended to influence future behavior, but it excludes actual rules, internal memos, and legal decisions made in court-like settings (adjudications). The goal is transparency: making sure everyone knows the difference between a strongly worded suggestion and an actual legal mandate.