the point of contention is not whether the observers should be allowed on the respective vessels, but instead whether the financial expense is necessary and reasonable to require of the fishermen. The Loper decision does not cement that a court should never proceed with an agency’s statutory interpretation, but instead discards the previous doctrine taken from Chevron that a court should always follow an agency’s interpretation as a result of its ambiguity. On a similar note, the Relentless case involved the Department of Commerce’s regulation regarding fishing quotas in the Atlantic herring fishery. Relentless, Inc. challenged the Department’s interpretation of the MSA arguing that it imposed quota restrictions that were an overreach of agency authority. The US Supreme Court sided with Relentless, Inc., concluding that the agency’s broad interpretations were not justified by the statute which curbs the agencies’ regulatory scope and upholds the judiciary’s role when it comes to statutory interpretation. Following this summary is an analysis of the impact on banking agencies and the SEC, a background behind the Chevron doctrine, and conflicting positions from different arenas. II. IMPACT ON BANKING AGENCIES AND THE SEC As previously mentioned, the modern Chevron doctrine contributes to a climate of unpredictable and unstable regulatory landscapes. The doctrine allowed footing for authorities to pen robust and costly regulations.1 Although the fall of Chevron is expected to create a new wave of litigation against those broad regulations, it has also been dubbed a “double edged sword” for financial institutions.2 This is because it will also make it easier for advocacy groups and state attorney generals to challenge regulations, which introduces even more uncertainty to banks.3 This trend can also be seen with respect to banking lobbyists who have been opposing regulatory agencies like the Consumer Financial Protection Bureau. As a result of the overruling, the CFPB’s interpretations will face stricter scrutiny and require more justification.4 This shift will complicate regulators’ tasks and continue the trend of lower courts challenging financial regulators’ actions especially in the 5th circuit. Furthermore, the overruling of Chevron may commence a discrepancy in rulings as a result of differing interpretations of federal judges. The Securities and Exchange Commission (SEC) has been able to impose and change regulations with minimal congressional involvement in the past. The recent decision could change the trajectory and directly impact rulemaking and regulation across a myriad of industries subject to the SEC. In fact, the SEC has relied heavily on its regulatory authority to oversee and enforce securities laws. Chevron deference had limited companies’ ability to sue agencies over their interpretations, often leading to broader, costlier rules. Its end is expected to trigger increased litigation challenging such rules. Scholars believe that an immediate impact following the overruling of Chevron would be seen in pending cases that currently challenge the SEC’s rules including the SEC’s new Climate Disclosure Rule. This is because litigants may be more willing to contest agency interpretations in hopes of a more favorable judicial review. The exacerbation of regulatory uncertainty, rulemaking, and pending litigation may hinder future investments and strategic decisions.5 Moreover, authorities such as the Securities and Exchange Commission, Federal Reserve, and the Office of the Comptroller of the Currency will now need to refrain from imposing Financial Regulatory Initiative/Authority Description Basis for Potential Challenge Implications of the Ruling Basel III Endgame (interagency proposed rule) The 2023 proposed rule on regulatory capital following 2023 spring bank failures. (1) APA (2) Major Questions Doctrine (3) Nondelegation Doctrine Strengthended opposition due to lack of Chevron deference, adding to existing criticisms. Anti-money laundering & counter-terrorist financing (AML/CFT) AML/CFT programs developed through FinCEN regulations and guidance, expensive and resource-demanding. Aggressive or questionable interpretations of statutory requirements. Financial institutions may challenge AML/CFT violations in court more frequently due to the new ruling. Fed master accounts for new applicants Institutions with novel charters argue for access to master accounts under the Federal Reserve Act. Ambiguity in the Federal Reserve Act’s language concerning master accounts. Potential for revisited litigation or appeal regarding access to master accounts. National Bank corporate powers National banks’ powers as enumerated in 12 USC 24 (Seventh), broad interpretation in 1995 VALIC decision. Dependence on Chevron deference for interpretation. The recent decision suggests interpretations could be upheld through statutory interpretation, not Chevron deference. Digital Assets Classification of digital assets under the Securities Act of 1933 and pre-clearance for certain bank activities. SEC jurisdiction over digital assets and permissibility of certain activities for banks. Challenges to federal banking agencies on the grounds of permissibility of digital asset activities, tempered by supervisory powers. Impact on Ruling on Regulatory Initiatives & Authorities 1 2 3 4 5 Source: Bonici, Clark, and Elizabeth Sines. “What Banks Need to Know Post-Chevron”. Veneable LLP. 01 July 2024. https://www.venable.com/insights/publications/2024/chevron-decision/what-banks-need-to-know-post-chevron. 13 chevron doctrine overturned
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