WASHINGTON–In a case that has had the attention of credit unions, the Supreme Court turned away what has been a longstanding legal precedent and as a result reduced the power of executive government agencies—potentially including NCUA--and in the process raising countless questions around regulations.
At issue is the so-called Chevron doctrine, sometimes also known as the Chevron deference, which stems from an a 40-year-old Supreme Court ruling in Chevron v. Natural Resources Defense Council, which essentially holds that when a legislative delegation to an administrative agency on a particular issue or question is not explicit but rather implicit, a court may not substitute its own interpretation of the statute for a reasonable interpretation made by the administrative agency.
In other words, courts have for four decades been deferring to regulatory agencies on many issues.
In addition to NCUA, the ruling could also have big implications for the CFPB and its many rulings.
According to the New York Times, the Chevron doctrine has been cited in 70 Supreme Court decisions and roughly 17,000 cases in the lower courts.
‘No Special Competence’
But in writing for the majority in the decision in the case Loper Bright Enterprises v. Raimondo, Secretary of Commerce, Chief Justice John G. Roberts Jr. said, “…agencies have no special competence” and that judges should determine the meaning of federal laws.
Many legal analysts had been predicting such a ruling could create a multitude of new challenges to federal rules of all types.
America's Credit Unions: 'Momentous Impact'
“The Supreme Court’s decision to overturn the Chevron doctrine that required courts to defer to administrative agencies’ interpretations of ambiguous acts of Congress has immense implications for highly regulated entities like credit unions," said America's Credit Unions' chief advocacy officer, Carrie Hunt. "While agencies, including the NCUA and CFPB, possess subject matter expertise, rulemakings and other agency actions must comply with the Administrative Procedure Act. This decision will have a momentous impact in the rule making process. While agencies’ rules may be easier to overturn, the rule making process itself will likely slow and be more cumbersome. We expect this decision will be both a help and hindrance to credit unions going forward.”
Defense Council Responds
“Today’s decision by the Supreme Court in the Loper case effectively overturned the Chevron doctrine that has empowered regulators and agencies to enact rules and regulations not approved by congressional action," Jason Stverak, DCUC chief advocacy officer, in a statement. "While the full effect of this decision remains to be seen, DCUC’s aggressive advocacy team remains fully engaged with members of Congress, the executive branch, and the NCUA to ensure that credit unions’ interests are represented.”
NCUA Responds
It is not known what effect, if any, the decision could have on NCUA. In a statement to CUToday.info, the agency said it is “reviewing the decision and will have no further comment at this time."
House Republicans Plan Oversight
In response to the Supreme Court ruling, House Speaker Mike Johnson (R-LA)) and several other Republican representatives said in a statement, “House Republican committees will be conducting oversight to ensure agencies follow the Court’s ruling.”