WASHINGTON, D.C. — Stephen Hall, Legal Director and Securities Specialist, issued the following statement on the release of a Better Markets report profiling the Supreme Court’s decisions that threaten the financial future of all Americans:

“In recent years, the Supreme Court has not only gutted individual liberties but also escalated its attacks on the agencies that protect the public from a wide range of threats, including predatory financial practices.   As a result of the Court’s increasingly pro-industry and anti-agency decisions, Americans will have fewer protections against fraud, abuse, and junk fees at the hands of banks, brokers, and other financial firms. The cops policing the financial markets will have fewer tools with which to punish and deter predatory conduct.  And those who become the victims of shady financial practices will have fewer remedies at their disposal when they seek to recover their losses and hold wrongdoers accountable.  The unsettling take away is clear:  Americans are increasingly on their own when it comes to protecting their savings, investments, and retirements.

“Unfortunately, the Court’s last term stands out thanks to a series of decisions that represent especially bad jurisprudence and bad policy outcomes. The Court abolished the longstanding principle that courts must defer to an agency’s expert interpretation of an ambiguous statutory provision that Congress has trusted the agency to implement (Loper Bright).  It declared open season on agency rules, no matter how old, by essentially nullifying the general time limit on court challenges to those rules (Corner Post). And the Court erased the ability of the Securities and Exchange Commission (“SEC”)—as well as other agencies—to seek civil penalties against fraudsters through enforcement actions decided by administrative law judges (Jarkesy).

“These anti-agency cases join others from earlier Supreme Court terms, including the 2022 decision in West Virginia v. EPA.  That decision gave the federal courts huge discretion, in the name of the ‘major questions doctrine,’ to dismantle agency rules whenever a judge believes the agency was too bold in addressing a problem—no matter how urgent or important the regulatory protections might be.

“At times, the Court got it right.  For example, it upheld the funding mechanism for the Consumer Financial Protection Bureau (“CFPB”).  That removed a dark cloud of uncertainty over the very existence of one of the most successful consumer protection agencies in history (Consumer Financial Services Ass’n).  On balance, though, the Court’s decisions last term unquestionably weakened the ability of agencies to protect the public. They also reveal the intensity of the Court’s animosity toward the administrative state—the network of agencies and rules that has safeguarded Americans from environmental degradation, unsafe consumer products, dangerous work conditions, domineering monopolies, and financial predators for over a century. These decisions foreshadow more of the same in the next Supreme Court term and for years to come.

“Our report reviews the Court’s decisions from last term in the area of financial regulation and administrative law.  It then looks ahead to the term about to begin on Monday, October 7, 2024, and it closes by reviewing some of the reforms that have emerged in response to the Court’s most extreme and ideological decisions.  We’ll hope for better results from the Court, especially in the area of investor and consumer protection, but we fear there is little reason for optimism.”

The report is available here and a fact sheet summarizing the report is here.

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.