Editor’s note: This column was included in the June 13 version of The Pulse, a weekly BankBeat newsletter sent to subscribers.
Legal experts are expecting the Supreme Court to announce soon that it is overturning the 1984 Chevron vs. Natural Resources Defense Council decision, which gave regulatory agencies expanded powers to interpret ambiguous laws coming from Congress. Recently, commercial fisheries challenged the rule and the case has made it all the way to the Supreme Court, which listened to arguments last January. According to at least one legal observer, a majority of justices seems to be ready to jettison the so-called Chevron doctrine, which would be a major disruption to the operations of many federal agencies.
I would be happy to see the regulatory agencies lose discretionary powers. Banker groups have filed lawsuits recently over what they consider to be regulatory overreach (think the FDIC on overdraft fees or the CFPB on Section 1071 data collections requirements). Members of Congress are elected, and therefore are accountable to the public; administrators are not. Many of the interpretative implementations made by regulators are far-reaching and are essentially extensions of the law, unauthorized by Congress. And that doesn’t even get into the ambiguity of all the “guidance” that is issued, which for all practical purposes is really “statute.”
The argument, of course, is that regulators know the issues better than elected officials and are best positioned to make final rules. But I say the kind of work regulatory agency administrators today conduct to implement laws after they are passed needs to happen with congressional staff before they are passed. Let’s work harder to write laws clearly so there is no need for interpretation during the implementation stage. This is not a matter of how much work is done on a law, but when it is done. If it happens before the law is passed, then an elected official can be held accountable, giving the public a strong voice. With Chevron, once Congress passes a law, it’s too easy for administrative staff to overreach and for elected officials to sidestep responsibility.
Let’s keep responsibility at the elected official level where the public has the greatest opportunity to impact the process. I say, good riddance to the Chevron doctrine.
