July 6, 2024 / VOLUME NO. 321

Will Chevron Be a Boon to Banks?

The banking industry applauded a major upset last week. The Supreme Court ruled in a 6-3 opinion to overturn the 40-year-old legal precedent known as Chevron deference, where judges defer to regulatory agencies in interpreting laws when the intent of the law is unclear. 


Rob Nichols, CEO of the American Bankers Association, acknowledged the ABA still is reviewing the full implications of the decision in Loper Bright Enterprises v. Raimondo, but he believed it was “an important win for accountability and predictability at a time when agencies are unleashing a tsunami of regulation.” 

The New York Times ran a headline in response to the decision that said: “Banks Stand to Benefit From the Supreme Court Decision on the Chevron Doctrine.” 

But will they? Others were not so sure. The doctrine is named after a 1984 case known as Chevron U.S.A. v. Natural Resources Defense Council. In it, the environmental group sued the Environmental Protection Agency over its interpretation of the Clean Air Act, which was favorable to industry. The EPA at the time was led by a Ronald Reagan appointee, Anne Gorsuch, who happens to be the mother of Supreme Court justice Neil Gorsuch, according to news reports.

Rulemaking from agencies with conservative appointees can be challenged just as easily as rulemaking from agencies with liberal heads. It goes both ways. What may end up happening is even more banking rules end up getting decided by the courts, as some have predicted. 

The result “does not mean less regulation; it just ensures more uncertainty about the obligations the law imposes on regulated entities,” wrote Columbia Law School Professor Kate Judge on the social platform X.

In fact, this sort of uncertainty is prevalent in bank regulation now. Just look at the banking groups’ and the U.S. Chamber of Commerce’s many lawsuits challenging regulation. Among them, judges have temporarily halted implementation of joint rulemaking interpreting the Community Reinvestment Act as well as the Consumer Financial Protection Bureau’s $8 cap on credit card late payments.  

“A court can always avoid getting to the Chevron deference in the first place by saying that a statute is not ambiguous,” said Randy Benjenk, a partner at Covington & Burling, in The New York Times. “In practice it’s been rare for a judge to conclude that a statute is ambiguous and defer to an agency’s interpretation of law.”

• Naomi Snyder, editor-in-chief for Bank Director 

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 “Organizations are just trying to do a better job, and not being beholden to an extortion threat is top of mind for running their business. … Now they're starting to treat cyber risk as a true reputational risk.” — Meredith Schnur, Marsh. 

• Laura Alix, director of research for Bank Director 

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About Bank Director

Bank Director provides research, peer-insight and executive and board services to the financial industry. CEOs, CFOs, Chairs and leadership teams at financial institutions, fintechs and financial services firms turn to Bank Director to keep pace with their ever-evolving business landscape.