Read the Article https://maddenlawpllc.com/wp-content/uploads/2019/02/A-Weapon-of-Mass-Destruction-Strikes.pdf... [Read more...]
Challenging a Decision of a Federal Agency
In the Dodd Frank Act, Congress directed several federal agencies, including the Board of Governors of the Federal Reserve System (FRB) and the Securities and Exchange Commission (SEC), [i] to jointly promulgate a regulation that requires securitizers of asset-backed securities to retain at least 5 percent of the credit risk of the underlying loans. 15 U.S.C. §78o-11(c)(1)(B)(i). In response, the agencies promulgated the Credit Risk Retention Rule (CRR Rule), 79 Fed. Reg. 77,601 (Dec. 24, 2014). The CRR Rule fosters appropriate underwriting of securitized loans by requiring securitizers to retain “skin in the game.” S. Rep. No. 111-176, at 129. The Loan Syndications and Trading Association (LSTA) sued the FRB and SEC challenging the application of the CRR Rule to a distinct segment of the asset-backed securitization market, known as collateralized loan obligations (CLOs).... [Read more...]
The wisdom of the administrative state, which has its roots in the Progressive and New Deal Eras, is much debated today in all three branches of the federal government. Given the stakeholders who benefit from regulation and those who seek to dismantle the regulatory-agency model, there is every reason to think that suits challenging decisions of the United States, including the president and federal agencies, will increase in the coming years for two reasons. Those who benefit from regulation will resist deregulation, in part, by challenging
in court an agency’s justification for repeal of regulations where repeal is inconsistent with the agency’s congressional mandate. Those favoring deregulation will challenge final agency decisions not only to slow or reverse the impact of regulation generally but also to advocate for overturning case law that requires the courts to defer to an agency’s interpretation of statutes it implements and its accompanying regulations.