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SCOTUS Wacks the Administrative State

SCOTUS Wacks the Administrative State

For those industries and businesses that are regulated by such federal agencies as the Consumer Financial Protection Bureau, the Securities and Exchange Commission, or the Federal Trade Commission, today’s U.S. Supreme Court ruling regarding the so-called Chevron deference is kind of a big deal.

SCOTUS reviewed two federal cases, Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce that involved the use of the Chevron deference established by a prior SCOTUS ruling 40 years ago. In that case, Chevron v. Natural Resources Defense Council, the high court ruled that federal courts should defer to regulatory agencies’ legal interpretations of federal regulations if the statutory language passed by Congress was ambiguous.

Today’s ruling not only allows judges greater leeway in analyzing claims by consumers and businesses that may be adversely affected by unclear regulations, but perhaps forces regulatory agencies to more cautiously and judiciously interpret unclear regulatory language and Congress to consider clearer and specific language to guide regulatory actions.

As AFSA has noted such agencies as the FTC and CFPB have taken regulatory actions that exceeded the authority provided by Congress, including the FTC’s rule imposing a nationwide ban on almost all noncompete clauses, and several CFPB actions related to collection of financial services industry and consumer data based on flawed interpretation of congressional intent or simply ignoring it, as well as the agency’s effort to create a nonbank registry on enforcement matters.

AFSA is hopeful that today’s high court ruling encourages the CFPB and other regulatory agencies to take a step back in its overly generous interpretation of congressional guidance, and just as important, that Congress will use this ruling to bring greater oversight and accountability to these agencies and their policies.

June 28th, 2024

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