The future of the U.S. leveraged lending guidance?

On 19 October 2017, the General Counsel of the U.S. Government Accountability Office ('GAO') issued an opinion (the 'GAO Opinion') concluding that the joint interagency guidance on leveraged lending ('LLG') issued in March 2013 by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation (collectively, the 'Agencies'), as a general statement of policy, is a rule for the purpose of the Congressional Review Act 1996 (the 'Act').

The conclusion by the GAO is significant for the US leveraged lending market as it potentially subjects the LLG to Congressional review, and could possibly lead to Congress invalidating it.

The GAO Opinion comes at a time when significant credit institutions supervised by the European Central Bank ('ECB') will soon be subject to similar guidance, as the ECB guidance on leveraged transactions is due to come into force on 16 November 2017 (the 'ECB Guidance').

Read more in our report on the future of the U.S. leveraged lending guidance.