The Regulatory Week in Review: July 14, 2017

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The CFPB decides to allow class-actions instead of requiring arbitration, the Senate confirms Neomi Rao as OIRA Administrator, and more…

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IN THE NEWS

  • The Consumer Financial Protection Bureau adopted a rule that would allow consumers to “band together in class-action lawsuits” instead of forcing the use of arbitration in consumer disputes with banks and credit card companies. The U.S. Chamber of Commerce called the rule a “prime example of an agency gone rogue.” Supporters of class-action argue that the practice is “intended to help big groups of people get back small amounts of money and can push companies to get rid of questionable business practices.”
  • The U.S. Senate confirmed Neomi Rao, a professor at the Antonin Scalia Law School, George Mason University, to be Administrator of the Office of Information and Regulatory Affairs (OIRA). OIRA, a part of the White House Office of Management and Budget, reviews proposed agency regulations before they can go into effect. Senator Elizabeth Warren (D-Mass.) urged her colleagues not to confirm Rao because “she will head the Trump Administration’s efforts to toss out the rules that big businesses don’t like.” Senator Ron Johnson (R-Wis.) praised Rao and said, “I look forward to working with Professor Rao to reduce the burden of regulations”
  • President Donald Trump nominated Randal K. Quarles, a former U.S. Treasury Department official, to serve as the Federal Reserve’s Vice Chairman for Supervision, the Reserve’s top banking regulator. Jordan Haedtler, Campaign Manager for the Fed Up coalition, expressed concern at the appointment stating Quarles has “looked out for his banker clients at the expense of America’s hard-working families.” Former colleagues of Quarles have reportedly said that he would “take a careful approach in pursuing measures to ease the regulatory burden on Wall Street.”
  • US Senate Majority Leader Mitch McConnell (R-Ky.) released a new proposal to replace the Affordable Care Act (ACA). The new draft would remove several of the current ACA regulatory requirements, allowing insurers to offer “bare-bones policies without coverage for services such as preventive or mental-health care,” while still leaving “deep proposed cuts to Medicaid.” Senator Susan Collins (R-Maine) reportedly stated the cuts to Medicaid “would hurt the most vulnerable citizens” and that she is a “‘no’ on the motion to proceed.” US Senators Bill Cassidy (R-La.) and John Hoeven (R-N.D.) reportedly said they were going to wait until the Congressional Budget Office score is completed next week before making a decision.
  • The American Civil Liberties Union (ACLU) filed a lawsuit in the U.S. District Court for the District of Columbia alleging that the Presidential Advisory Commission on Election Integrity violated the Federal Advisory Committee Act (FACA). The ACLU contended the Commission violated FACA’s non-discretionary transparency and public access requirements and that the committee’s membership be ‘fairly balanced in terms of points of view.’”
  • The U.S. Environmental Protection Agency (EPA) issued a notice of intent to retract a 2014 proposal which would have protected “certain waters” in Alaska from being used “as disposal sites” by companies that mine copper and gold in “the Pebble deposit.” The 2014 proposal, which was authorized under the Clean Water Act, sought to combat the “unacceptable environmental effects” caused by the mining. EPA’s retraction adheres to “a May 11, 2017 settlement agreement with the Pebble Limited Partnership, whose subsidiaries own the mineral claims to the Pebble deposit.”
  • The U.S. Court of Appeals for the District of Columbia Circuit addressed a 2015 EPA rule “governing when certain hazardous materials qualify as ‘discarded’ and hence are subjected to the agency’s regulatory authority” under the Resource Conservation and Recovery Act (RCRA). Industry challenged the rule as “unlawful and arbitrary and capricious.” The D.C. Circuit upheld a provision of the rule that compels containment of certain waste, but rejected as “unreasonable” a provision that regulated the recycling of hazardous materials “into valuable products.” The court also restored an early provision that allowed “the party offloading the materials to a reclaimer that possessed a RCRA permit” and rejected most of a newer, stricter version of that provision.
  • The U.S. House of Representatives Committee on Appropriations released its 2018 Interior and Environment Bill. The Appropriations Committee reported that the bill provides $7.5 billion of funding for the EPA, which is $258 million less than EPA’s funding during the 2017 fiscal year but $1.9 billion more than what President Donald Trump wanted to provide. The Appropriations Committee argued that the “bill will rein in burdensome regulations.”
  • The U.S. Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight announced it will conduct a comprehensive review of the Commission’s swap reporting regulations, rules governing how and when parties report data concerning exchanges of cash. The Division hopes to “streamline reporting,” while also ensuring that the CFTC “receives accurate, complete, and high quality data on swaps.”
  • Internet companies took part in a “Day of Action” to urge the Federal Communications Commission (FCC) not to repeal its “net neutrality” rule. Earlier this year the FCC issued a notice of proposed rulemaking to repeal that regulation, which prohibits Internet service providers from “blocking, throttling, and paid prioritization of” content. Google posted a message encouraging its users to “call on the FCC to preserve the open Internet.” Internet service provider AT&T also joined the Day of Action despite its opposition to the current regulations because it believes “that an open Internet is critical for ensuring freedom of expression and a free flow of ideas and commerce in the United States and around the world.”

WHAT WE’RE READING THIS WEEK

  • Nicholas Clairmont, a former editorial fellow at The Atlantic, questioned D.C.’s new “regulations that require child-care workers to have college degrees.” The Office of the State Superintendent of Education created the policy mostly in response to a scientific report that emphasized the importance of early education. Clairmont cautioned that although child-care regulations for children under “kindergarten age” seek to improve educational opportunities for children, those rules may end up “regulating out of existence the daycare providers that aren’t officially educational.” Noting that D.C. regulators should have taken into account “social and economic” issues before promoting the policy, Clairmont believed the new policy “will almost definitely backfire.
  • An American Action Forum report authored by Jacqueline Varas, the organization’s Director of Immigration and Trade Policy, and data analysts Philip Rossetti and Brianna Fernandez contended that “Buy America” transit authority procurement policies are, in part, responsible “for higher infrastructure costs” and “for a slew of regulations imposed on infrastructure development.” The authors found “a correlation between open economies and low metro car procurement costs,” and suggested that the United States “curtail Buy America policies to yield greater benefits from government expenditures.”
  • In a forthcoming article in the California Law Review, Gregory Ablavsky, Assistant Professor of Law at Stanford Law School, discussed how the federal government came to own most of the public land within the United States, a process Ablavsky terms the “rise of the federal title.” Ablavsky argued the rise of the federal title is “under threat” as courts have ignored this history, or have based their understanding on “erroneous” history in which it is illegal for the federal government to own land.