American Banker: Supreme Court shuffle: 5 possible reverberations for banks

American Banker, July 9, 2018: Supreme Court shuffle: 5 possible reverberations for banks

A Supreme Court that moves even further to the right with the appointment of Judge Brett Kavanaugh could make the policy horizon even brighter for the financial services industry.

President Trump announced the nomination Monday night of Kavanaugh, who sits on the U.S. Court of Appeals for the D.C. Circuit, to fill the seat vacated by Justice Anthony Kennedy. His confirmation would further bolster the conservative majority on the high court.

While much of the focus on a Kennedy successor has centered on how a more conservative justice — and therefore a more conservative majority on the court — will affect social issues such as abortion, a more rightward shift is seen as another positive for a business community that has already made gains from congressional reform of financial regulation and the tax code.

Here are five financial policy areas that could be impacted by a more conservative court:

Chevron doctrine

A major concern of banks and financial firms is the measure of judicial deference given to administrative agencies.

Given that Trump has been eliminating regulations put in place by former President Barack Obama, a Trump nominee would be expected to side against administrative overreach, an issue Republicans have been chipping away at since the 1960s, lawyers said.

Supreme Court
Much of the financial litigation winding its way to the Supreme Court has at its core what deference is due to an agency in interpreting existing bank regulatory policy.
Bloomberg News
“What businesses care about are legal certainty, principles of deregulation and the ability to conduct their business without administrative overreach,” said Don Lampe, a partner at Morrison & Foerster.

Much of the financial litigation winding its way to the Supreme Court has at its core what deference is due to an agency in interpreting existing bank regulatory policy.

“Justice Kennedy, a conservative, wrote in 2015 that ’restrictions that unfairly exclude minorities’ are unlawful,” said Jesse Van Tol, the CEO of the National Community Reinvestment Coalition.“This is a simple standard of fairness.”

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