Posts Tagged ‘Dodd-Frank’

Banking and finance roundup

Banking and finance roundup

  • “State-run retirement plans are the wrong way to protect the poor” [Andrew G. Biggs, AEI]
  • Fifth Circuit panel: Federal Housing Finance Agency (FHFA) “is unconstitutionally structured and violates the separation of powers” [Jonathan Adler] Unconstitutional structure afflicts Consumer Finance Protection Bureau too [Ilya Shapiro on Cato amicus brief in Fifth Circuit case of CFPB v. All American Check Cashing, earlier here, etc.]
  • Study: financial advisers in Canada who are not subject to fiduciary duty have personal investments similar to their clients [Peter Van Doren]
  • Regulation can have a lulling effect. Might it even breed financial illiteracy? [Diego Zuluaga, Cato]
  • “As I predicted, the ratchet effect is going to save Dodd-Frank. Sigh.” [Bainbridge]
  • “SEC proposes to limit whistleblower awards” [Francine McKenna, MarketWatch]

Banking and finance roundup

Banking and finance roundup

Banking and finance roundup

  • New research suggests “SEC rule intended to prevent conflicts of interest among staff has actually had the perverse effect of causing staff to profit from their knowledge as insiders of the SEC” [Thaya Brook Knight, Cato]
  • “Federal Prohibition Left California Cannabis Farmers Without Insurance or Banks When Wildfires Struck” [Christian Britschgi]
  • “Is Dodd-Frank/SOX reform dead?” [Stephen Bainbridge]
  • Trial lawyers and CFPB did little to correct Wells Fargo fake-account scandal [Ted Frank WSJ letter]
  • Study finds that more-cumbersome judicial foreclosure methods tend to correlate with tougher lending standards especially for poor; should constriction of home credit for poorer households be interpreted as a good? [Brian Feinstein, Chicago via CL&P]
  • A different way to encourage more prudent home lending practice, scale back FDIC coverage [Scott Sumner]

Time to revisit the Chevron stretch

A case called Digital Realty Trust v. Somers gives the Supreme Court a chance to rein in a particularly inappropriate use of the Chevron doctrine, under which courts give deference to agencies’ interpretations of law [Ilya Shapiro, Harvard Law Review blog]

The last few years have of course seen renewed attention — academic, judicial, and journalistic — to the question of whether courts have become altogether too deferential to executive agencies. While Chevron deference (and its cousins, Auer and Seminole Rock deference) was originally justified as a necessary tool for preventing courts from unduly meddling in administrative decisionmaking, hasn’t the pendulum swung too far?…

As the Supreme Court explained in Long Island Care at Home, Ltd. v. Coke in 2007, the APA [Administrative Procedure Act] requires an agency conducting notice-and-comment rulemaking to provide the public with “fair notice” of what will be, or might be, included in its final regulation. Yet there was nothing in the [Securities and Exchange Commission’s Notice of Proposed Rulemaking] that would have given any notice to the public that it was going to change whom Dodd-Frank would protect from retaliation.

Just last year, the Court reaffirmed in Encino Motorcars, LLC v. Navarro that procedurally deficient rules that violate the APA do not receive Chevron deference because they lack the “force of law.” The SEC regulation here was procedurally deficient because of the final rule’s fair-notice problem, so it shouldn’t qualify for Chevron.

More on the Somers case and Cato’s amicus brief: Trevor Burrus and Frank Garrison.

Banking and finance roundup

Banking and finance roundup

  • “The real-world impact of Dodd-Frank, stress tests and other regs” [M&T Bank slideshow, American Banker] “Six feet of new mortgage regulations help explain slower housing market” [Ira Stoll]
  • Will Trump administration allow banking for cannabis-related businesses? [Kevin Funnell]
  • “‘Sustainability Standards’ Open A Pandora’s Box Of Politically Correct Accounting” [Howard Husock and Jim Copland]
  • An assumption of complete transparency would take away “the reason for financial intermediation in the first place” [Arnold Kling]
  • Statutes of repose in securities actions are important in protecting interests on both sides [WLF on CalPERS v. ANZ Securities, Inc.]
  • Encrypted messaging services allow Wall Streeters to bypass all sorts of regulatory scrutiny and speak freely, can’t have that [Bloomberg]

Good riddance (if they’re indeed going) to the Dodd-Frank conflict minerals rules

President Trump is said to be considering an executive order suspending for a time the Dodd-Frank law’s provisions on conflict minerals, which have harmed American companies and consumers and also plunged many communities further into impoverishment in some of the poorest sections of Africa. Congress should rise to its part by repealing the provisions, I argue at Cato at Liberty. More: Hans Bader/CEI, Kevin Drum/Mother Jones, earlier, and as part of a wider look at securities regulation, Wallace DeWitt/National Affairs. More: Dominic P. Parker and Bryan Vadheim, JAERE; Tate Watkins, WSJ.

Banking and finance roundup