1 00:00:03,120 --> 00:00:07,960 Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio. 2 00:00:09,480 --> 00:00:12,560 Speaker 1: A half a trillion dollars showdown at the Supreme Court, 3 00:00:12,840 --> 00:00:15,880 Speaker 1: as the Justice has weighed the fate of President Joe 4 00:00:16,000 --> 00:00:20,600 Speaker 1: Biden's student loan forgiveness plan. The conservative justice has seemed 5 00:00:20,680 --> 00:00:25,040 Speaker 1: highly skeptical that Biden had the authority to broadly cancel 6 00:00:25,200 --> 00:00:28,720 Speaker 1: federal student loans of up to forty three million Americans. 7 00:00:29,280 --> 00:00:32,720 Speaker 1: To many, the enormous price tag was a concern and 8 00:00:32,880 --> 00:00:35,920 Speaker 1: an indication that it was a job for Congress, not 9 00:00:36,000 --> 00:00:39,839 Speaker 1: the president. Here are Chief Justice John Roberts and Justice 10 00:00:39,960 --> 00:00:44,760 Speaker 1: Samuel Alito. We're talking about half a trillion dollars and 11 00:00:45,280 --> 00:00:49,680 Speaker 1: forty three million Americans. How does that fit under the 12 00:00:49,800 --> 00:00:54,840 Speaker 1: normal understanding of modifying seems to presume that when it 13 00:00:54,880 --> 00:00:59,840 Speaker 1: comes to the administration of benefits programs, trillion dollars here, 14 00:01:00,040 --> 00:01:03,640 Speaker 1: tillion dollars there doesn't really make that much difference. To Congress. 15 00:01:03,640 --> 00:01:09,080 Speaker 1: That doesn't seem very sensible. But there was support for 16 00:01:09,120 --> 00:01:12,680 Speaker 1: the program from the liberal justices. Here are Justice is 17 00:01:12,720 --> 00:01:16,360 Speaker 1: Elena Kagan and Sonya so To. Mayor. Congress used its 18 00:01:16,400 --> 00:01:19,600 Speaker 1: voice in enacting this piece of legislation. Oh, this business 19 00:01:19,640 --> 00:01:23,120 Speaker 1: about executive power. I mean, we worry about executive power 20 00:01:23,480 --> 00:01:27,240 Speaker 1: when Congress hasn't authorized the use of executive power. Here, 21 00:01:27,319 --> 00:01:30,520 Speaker 1: Congress has authorized the use of executive power in an 22 00:01:30,600 --> 00:01:36,680 Speaker 1: emergency situation. Those are exceptions that clearly are permitted under 23 00:01:36,720 --> 00:01:40,000 Speaker 1: the AHA to cancel a debt. So why would I 24 00:01:40,080 --> 00:01:44,120 Speaker 1: have a view that Congress didn't understand that in an 25 00:01:44,160 --> 00:01:49,160 Speaker 1: improper emergency debt cancelation would be right? My guest is 26 00:01:49,160 --> 00:01:52,320 Speaker 1: Harold Grant, a professor at the Chicago Kent College of Law. 27 00:01:53,240 --> 00:01:56,760 Speaker 1: So how does it appear as if the Court's conservative 28 00:01:56,800 --> 00:02:01,320 Speaker 1: majority is, to put it mildly, that Biden has the 29 00:02:01,360 --> 00:02:05,240 Speaker 1: power to implement this plan under the Hero's Act. To 30 00:02:05,360 --> 00:02:08,239 Speaker 1: put it mildly, yes, the majority of the Court is 31 00:02:08,320 --> 00:02:12,720 Speaker 1: very skeptical that the statute empowers to Biden administration with 32 00:02:12,880 --> 00:02:16,840 Speaker 1: the power to cancel all of the student loans. And 33 00:02:16,880 --> 00:02:19,960 Speaker 1: the reason is that the statute does give the administration 34 00:02:20,040 --> 00:02:23,840 Speaker 1: power to waiver modify unique provision under the Act in 35 00:02:23,880 --> 00:02:27,680 Speaker 1: an emergency. And so much of the argument turns on 36 00:02:27,960 --> 00:02:31,359 Speaker 1: what's the expanse of waiver and modification and did Congress 37 00:02:31,400 --> 00:02:35,680 Speaker 1: ever intend waiver and modification to include cancelation of up 38 00:02:35,680 --> 00:02:39,480 Speaker 1: to four hundred billion dollars of that was such a 39 00:02:39,520 --> 00:02:43,560 Speaker 1: tremendous impact upon the economy. And to put it again, 40 00:02:43,600 --> 00:02:46,360 Speaker 1: as you stated, to put it mildly, Chief Justice Robberts 41 00:02:46,440 --> 00:02:50,200 Speaker 1: was emphatically clear that he'd never thought that Congress would 42 00:02:50,200 --> 00:02:54,600 Speaker 1: have given so much expansive authority to the administration to 43 00:02:54,760 --> 00:02:57,640 Speaker 1: take that kind of action with such a broad impact 44 00:02:57,680 --> 00:03:01,400 Speaker 1: on the economy. In other words, this emergency power, according 45 00:03:01,440 --> 00:03:06,919 Speaker 1: to the seeming majority of justices, maybe postponing debt may 46 00:03:06,960 --> 00:03:11,400 Speaker 1: be limiting interest payments, but certainly didn't entail such broad 47 00:03:11,480 --> 00:03:15,320 Speaker 1: cancelation authority. Does it seem like the only hope really 48 00:03:15,560 --> 00:03:19,120 Speaker 1: for the student loan forgiveness program is if the justices 49 00:03:19,160 --> 00:03:23,880 Speaker 1: don't find standing. There's grave questions about whether the plaintiffs 50 00:03:23,880 --> 00:03:28,320 Speaker 1: in both combined cases have what's called standing to proceed. 51 00:03:28,520 --> 00:03:32,040 Speaker 1: There are lots of questions raised about whether the states 52 00:03:32,240 --> 00:03:36,080 Speaker 1: can demonstrate their sufficient injury to continue the case. And 53 00:03:36,120 --> 00:03:39,880 Speaker 1: with respect to the students were not benefited by the 54 00:03:39,920 --> 00:03:44,840 Speaker 1: loan cancelation, whether they have standing as being frustrated because 55 00:03:45,400 --> 00:03:49,760 Speaker 1: Biden didn't include them in the package of loans that 56 00:03:49,800 --> 00:03:52,560 Speaker 1: were to be canceled, so they may not have any 57 00:03:52,640 --> 00:03:56,080 Speaker 1: kind of recognized injury to pursue these claims anyway. And 58 00:03:56,080 --> 00:03:58,720 Speaker 1: of course their claim is odd. Their claim is it's 59 00:03:59,080 --> 00:04:01,200 Speaker 1: we should have been included it, and so you should 60 00:04:01,480 --> 00:04:05,280 Speaker 1: knock down the Biden plan. That's a very strange kind 61 00:04:05,320 --> 00:04:07,280 Speaker 1: of standing. And I do think it's fair to say 62 00:04:07,280 --> 00:04:10,400 Speaker 1: that if the court takes this case decides it on 63 00:04:10,440 --> 00:04:13,160 Speaker 1: the merits, which would not for sure but likely go 64 00:04:13,280 --> 00:04:17,279 Speaker 1: against the Abiden administration, they will be broadening standing, which 65 00:04:17,320 --> 00:04:19,640 Speaker 1: is unusual because this court in the past is most 66 00:04:19,640 --> 00:04:23,160 Speaker 1: recently narrowed standing in lots of different ways. So that's 67 00:04:23,200 --> 00:04:24,919 Speaker 1: why I think this is a tough case. You have 68 00:04:25,000 --> 00:04:28,120 Speaker 1: a case on standing being able to get into court, 69 00:04:28,160 --> 00:04:31,640 Speaker 1: which is challenging, but on the merits, based on the 70 00:04:31,760 --> 00:04:34,279 Speaker 1: oral argument, at least a good number of the court, 71 00:04:34,680 --> 00:04:39,000 Speaker 1: we're saying that Biden administration overstepped its bounds in deciding 72 00:04:39,040 --> 00:04:42,520 Speaker 1: to cancel these student debts, which could be twenty five 73 00:04:42,560 --> 00:04:45,520 Speaker 1: to forty million people at a cost over thirty years 74 00:04:45,520 --> 00:04:48,040 Speaker 1: of four hundred billion dollars to the economy, which again, 75 00:04:48,080 --> 00:04:51,680 Speaker 1: this is a huge undertaking by the Abiden administration. So 76 00:04:51,920 --> 00:04:54,599 Speaker 1: let's look at standing first, Because it seemed as if 77 00:04:54,680 --> 00:04:59,560 Speaker 1: the liberal justices were more concerned about standing, except for 78 00:04:59,720 --> 00:05:04,279 Speaker 1: just does any Coney Barrett, Here's justice any Coney Barrett 79 00:05:04,440 --> 00:05:09,000 Speaker 1: questioning Missouri's standing. Why didn't the state just make Mohila 80 00:05:09,040 --> 00:05:11,479 Speaker 1: come then, if Mohilla is really an arm of the state, 81 00:05:11,600 --> 00:05:13,080 Speaker 1: and all of this would be a lot easier than 82 00:05:13,120 --> 00:05:15,560 Speaker 1: The Solicitor General conceded that if Mohila was here, Mohila 83 00:05:15,600 --> 00:05:18,039 Speaker 1: would have standing. If Mohilla is an arm of the state, 84 00:05:18,080 --> 00:05:20,200 Speaker 1: why didn't you just strong arm Mohilla and say you've 85 00:05:20,240 --> 00:05:23,360 Speaker 1: got to pursue this suit. Yeah, So there's two theories 86 00:05:23,360 --> 00:05:25,960 Speaker 1: of standing with respect of the states. All the states 87 00:05:25,960 --> 00:05:29,400 Speaker 1: said that they will have injuring fact because their tax 88 00:05:29,480 --> 00:05:34,919 Speaker 1: revenues may go down because of the cancelation by the 89 00:05:34,960 --> 00:05:37,840 Speaker 1: Biden administration of the student loans. That argument, I think 90 00:05:37,920 --> 00:05:41,440 Speaker 1: is very weak, because, if anything, their tax proceeds may 91 00:05:41,440 --> 00:05:45,279 Speaker 1: go up because of the student debt forgiveness, because people 92 00:05:45,279 --> 00:05:47,159 Speaker 1: will have more money to spend and more money to 93 00:05:47,279 --> 00:05:50,320 Speaker 1: invest in, more confidence in the economy about the respect 94 00:05:50,320 --> 00:05:53,000 Speaker 1: of state, So the states can't show a connection between 95 00:05:53,360 --> 00:05:56,640 Speaker 1: cancelation of student debt and any kind of harm to 96 00:05:56,680 --> 00:06:00,200 Speaker 1: their tax claffers. Both the size of both the Biden 97 00:06:00,200 --> 00:06:05,400 Speaker 1: administration and the plaintiffs argued that a entity that processes loans, 98 00:06:05,680 --> 00:06:08,240 Speaker 1: they might suffer because of the fact that there will 99 00:06:08,279 --> 00:06:11,159 Speaker 1: be fewer people that turn to them for processing loans 100 00:06:11,160 --> 00:06:13,920 Speaker 1: because their loans will be forgiven under the Biden plan, 101 00:06:14,080 --> 00:06:16,760 Speaker 1: And that's true, that would be injury. In fact, most 102 00:06:16,800 --> 00:06:20,320 Speaker 1: of those loan processors are private. There is one processor 103 00:06:20,400 --> 00:06:24,560 Speaker 1: in Missouri which is a kind of state corporation that's 104 00:06:24,640 --> 00:06:27,440 Speaker 1: separate from the state but yet is public, and so 105 00:06:27,480 --> 00:06:30,400 Speaker 1: that's called Mahilla. And so it was a question as 106 00:06:30,520 --> 00:06:33,520 Speaker 1: even though they haven't come in into this case, they 107 00:06:33,560 --> 00:06:37,800 Speaker 1: have ensued whether Missouri as a state has enough overlap 108 00:06:38,040 --> 00:06:41,120 Speaker 1: with Mohilla, so that day in essence can say that 109 00:06:41,160 --> 00:06:44,960 Speaker 1: either they will be affected if Mohilla suffers, or where 110 00:06:45,000 --> 00:06:48,240 Speaker 1: they can raise Mahillo's claims on behalf of Mahla because 111 00:06:48,400 --> 00:06:50,880 Speaker 1: they're both part of the state of Missouri. So that 112 00:06:51,000 --> 00:06:54,560 Speaker 1: was the nexus of the standing argument that was presented. 113 00:06:54,600 --> 00:06:58,919 Speaker 1: And it's a very complicated question because under Missouri Lawhilla 114 00:06:59,160 --> 00:07:01,480 Speaker 1: can sue and be sued in its own name, and 115 00:07:01,520 --> 00:07:05,160 Speaker 1: its debts will not be subject to being paid by 116 00:07:05,200 --> 00:07:07,880 Speaker 1: the state of Missouri. So there are a state created institution, 117 00:07:07,960 --> 00:07:11,040 Speaker 1: but they're separate from the coffers of the state, and 118 00:07:11,120 --> 00:07:13,800 Speaker 1: they chose not to sue in this case. So that's 119 00:07:13,800 --> 00:07:17,080 Speaker 1: the question is whether that injury, which everybody recognizes sufficient 120 00:07:17,120 --> 00:07:20,000 Speaker 1: for injury in fact, whether Missouri as a state can 121 00:07:20,000 --> 00:07:22,640 Speaker 1: stand in the shoes of that injury and advocate it 122 00:07:22,640 --> 00:07:24,960 Speaker 1: in order to get into court to challenge the student 123 00:07:25,000 --> 00:07:28,200 Speaker 1: debt program. Let's talk about the merits. What do you 124 00:07:28,200 --> 00:07:31,440 Speaker 1: think was the main concern of the justices? Was it 125 00:07:32,000 --> 00:07:35,400 Speaker 1: a problem with separation of powers? Was it something else? 126 00:07:35,800 --> 00:07:39,120 Speaker 1: The problem that the justices sought articulated over and over 127 00:07:39,480 --> 00:07:42,760 Speaker 1: is this is a massive program. And did Congress when 128 00:07:42,760 --> 00:07:46,600 Speaker 1: it enacted the Heroes Act and gave the administration the 129 00:07:46,640 --> 00:07:51,280 Speaker 1: power and emergency to make modifications to the student loan programs, 130 00:07:51,520 --> 00:07:55,200 Speaker 1: did they ever envision something on this scale, a scale 131 00:07:55,280 --> 00:07:58,040 Speaker 1: that would encompass twenty five to forty million people in 132 00:07:58,040 --> 00:08:01,600 Speaker 1: this country, a scale that could cause cancelation of debts 133 00:08:01,680 --> 00:08:04,400 Speaker 1: to the amount of four hundred billion dollars over thirty years. 134 00:08:04,440 --> 00:08:06,200 Speaker 1: And I think they just thought that this was such 135 00:08:06,280 --> 00:08:10,480 Speaker 1: a massive scale that the Biden administration wasn't just sort 136 00:08:10,480 --> 00:08:13,680 Speaker 1: of modifying the program in a national emergency, but by 137 00:08:13,760 --> 00:08:16,880 Speaker 1: canceling debt, it was actually changing the nature of the 138 00:08:16,960 --> 00:08:20,600 Speaker 1: student loan program. And the question is whether Congress really 139 00:08:20,840 --> 00:08:25,640 Speaker 1: anticipated or envisioned an administration having that much power, even 140 00:08:25,680 --> 00:08:28,280 Speaker 1: though they said that you should have extraordinary powers in 141 00:08:28,320 --> 00:08:30,880 Speaker 1: the face of an emergency. So most of the argument 142 00:08:30,880 --> 00:08:34,720 Speaker 1: with respect of the merits just delved into what degree 143 00:08:35,040 --> 00:08:39,439 Speaker 1: of modification power the administration could use in an emergency. 144 00:08:39,760 --> 00:08:43,360 Speaker 1: Everybody agreed that COVID would be a relevant emergency, but 145 00:08:43,520 --> 00:08:47,960 Speaker 1: did that emergency justify a complete transformation of the student 146 00:08:48,000 --> 00:08:51,000 Speaker 1: loan program? That was the nub of the merits argument. 147 00:08:51,280 --> 00:08:54,719 Speaker 1: I mean, is this all about the major questions doctrine 148 00:08:55,240 --> 00:08:59,520 Speaker 1: that the Court has used before to stop Biden administration 149 00:09:00,080 --> 00:09:04,439 Speaker 1: initiatives during the pandemic, like the moratorium on randal evictions 150 00:09:04,480 --> 00:09:07,360 Speaker 1: that was struck down. The Court did invoke the major 151 00:09:07,400 --> 00:09:10,280 Speaker 1: questions doctrine as a way to suggest that if we're 152 00:09:10,280 --> 00:09:13,800 Speaker 1: not sure about the scope of Congress's intended delegation, then 153 00:09:13,840 --> 00:09:16,120 Speaker 1: we should put our finger on the scale of saying 154 00:09:16,120 --> 00:09:19,240 Speaker 1: we don't allow an agency to take such kind of 155 00:09:19,440 --> 00:09:23,480 Speaker 1: wide and expansive action unless we're very confident that the 156 00:09:23,520 --> 00:09:26,560 Speaker 1: Congress wanted them to go that far. And the language 157 00:09:26,679 --> 00:09:30,400 Speaker 1: under the Heroes Act, under which the Biden administration predicated 158 00:09:30,440 --> 00:09:33,600 Speaker 1: this change, allows the sector of Education to make a 159 00:09:33,640 --> 00:09:38,360 Speaker 1: waiver and a modification to the program. So clearly Congress said, 160 00:09:38,640 --> 00:09:40,920 Speaker 1: we think you should take action in an emergency. And 161 00:09:40,960 --> 00:09:43,840 Speaker 1: the question is, by using the language waiver and modification, 162 00:09:44,360 --> 00:09:48,200 Speaker 1: does that include cancelation as well? And if you have 163 00:09:48,440 --> 00:09:51,280 Speaker 1: the sort of priors, if you will or you have 164 00:09:51,440 --> 00:09:56,840 Speaker 1: the expectation that agencies should not take expansive interpretations of 165 00:09:56,920 --> 00:10:00,520 Speaker 1: authority granted by Congress, then you come down the side 166 00:10:00,600 --> 00:10:04,120 Speaker 1: that a cancelation does not equal a waiver or a modification. 167 00:10:04,320 --> 00:10:05,720 Speaker 1: But if, on the other hand, if you come down 168 00:10:05,800 --> 00:10:08,720 Speaker 1: the side that Congress was acting in an extraordinary way 169 00:10:08,840 --> 00:10:12,000 Speaker 1: saying you the administration should take extraordinary measures in the 170 00:10:12,000 --> 00:10:14,960 Speaker 1: face of an emergency, then a waiver and a modification 171 00:10:15,040 --> 00:10:18,120 Speaker 1: can include a cancelation. And then what the Biden administration 172 00:10:18,160 --> 00:10:21,920 Speaker 1: would be upheld. Even Justice Kavanaugh said that you know, 173 00:10:22,080 --> 00:10:25,360 Speaker 1: Congress acted here, thought about the problem, and it wanted 174 00:10:25,400 --> 00:10:30,079 Speaker 1: to give the Education Department extraordinary powers to protect Americans 175 00:10:30,320 --> 00:10:32,680 Speaker 1: in the face of any kind of emergency, whether it's 176 00:10:32,760 --> 00:10:36,200 Speaker 1: like nine to eleven, which precipitated passage of the Hero's Act, 177 00:10:36,559 --> 00:10:39,800 Speaker 1: or if it's like COVID. So there is a question, 178 00:10:39,840 --> 00:10:43,800 Speaker 1: even with respect to the so called conservative justices, how 179 00:10:43,840 --> 00:10:46,679 Speaker 1: they may come down if they reach the mirrors on 180 00:10:46,720 --> 00:10:50,200 Speaker 1: this delegation issue. Justice Kavanaugh also said that some of 181 00:10:50,240 --> 00:10:53,760 Speaker 1: the biggest mistakes in the Court's history were deferring to 182 00:10:53,840 --> 00:10:57,680 Speaker 1: assertions of executive or emergency power. He did say that 183 00:10:57,760 --> 00:11:01,319 Speaker 1: he was referring to the seizure of the mills in 184 00:11:01,360 --> 00:11:04,959 Speaker 1: the Korean War by President Truman. Maybe he was referring 185 00:11:05,000 --> 00:11:07,560 Speaker 1: to President Trump and the border wall from when he 186 00:11:07,600 --> 00:11:09,880 Speaker 1: invoked the emergency for that, I don't know, but he 187 00:11:09,960 --> 00:11:13,240 Speaker 1: was also probably talking about what we did after nine 188 00:11:13,280 --> 00:11:17,040 Speaker 1: to eleven in terms of guantanamobey as well. The other 189 00:11:17,160 --> 00:11:19,240 Speaker 1: justices didn't seem to pick up on this. I mean, 190 00:11:19,240 --> 00:11:22,440 Speaker 1: I think that what Justice Kevin I said is very important. 191 00:11:22,720 --> 00:11:25,760 Speaker 1: That you have to be very careful about allowing an 192 00:11:25,760 --> 00:11:29,959 Speaker 1: emergency declaration to paper over the kind of legal issues 193 00:11:30,160 --> 00:11:33,760 Speaker 1: that may arise, and that certainly was manifested in Youngstown 194 00:11:33,840 --> 00:11:36,600 Speaker 1: steal as well as in some other cases. But most 195 00:11:36,600 --> 00:11:38,520 Speaker 1: of the rest of the Court seemed focused on whether 196 00:11:38,520 --> 00:11:41,240 Speaker 1: this was an excessive delegation. In other words, whether the 197 00:11:41,400 --> 00:11:44,880 Speaker 1: Education Department went outside the borders of what Congress would 198 00:11:44,880 --> 00:11:48,080 Speaker 1: have anticipated, as opposed to debating whether this is a 199 00:11:48,120 --> 00:11:52,280 Speaker 1: proper invocation of an emergency or not. I mean, the 200 00:11:52,280 --> 00:11:57,280 Speaker 1: difficulty is clearly many Americans felt the sting of COVID 201 00:11:57,600 --> 00:12:00,600 Speaker 1: and the fact of having to bear these student loans 202 00:12:01,040 --> 00:12:04,960 Speaker 1: during a time of economic privation was extremely tough. But 203 00:12:05,360 --> 00:12:09,120 Speaker 1: does that say just forbearance and wait three years before 204 00:12:09,160 --> 00:12:10,760 Speaker 1: you pay off the loan, or does that say you 205 00:12:10,800 --> 00:12:14,080 Speaker 1: could actually cancel the student loans themselves. And that's a 206 00:12:14,080 --> 00:12:16,760 Speaker 1: big difference. And I think the Court was troubled by 207 00:12:16,760 --> 00:12:20,280 Speaker 1: the fact that Congress had an explicitly given the power 208 00:12:20,600 --> 00:12:24,200 Speaker 1: to the Education Department to cancel loans as opposed to 209 00:12:24,240 --> 00:12:27,160 Speaker 1: just issue forbearance. I think they all would agree that 210 00:12:27,240 --> 00:12:30,600 Speaker 1: the Education Secretary had the power to say, Okay, let's 211 00:12:30,600 --> 00:12:32,880 Speaker 1: wait three years before we collect your loans. We won't 212 00:12:32,920 --> 00:12:35,640 Speaker 1: charge you interest. Let's wait five years. That would have 213 00:12:35,679 --> 00:12:38,760 Speaker 1: been okay, But the question of cancelation, maybe that was 214 00:12:38,800 --> 00:12:41,520 Speaker 1: too far in the minds of at least a number 215 00:12:41,520 --> 00:12:46,240 Speaker 1: of the justices. Several of the conservative justices, including the 216 00:12:46,320 --> 00:12:50,560 Speaker 1: Chief talking about what he called the fairness argument, which 217 00:12:50,679 --> 00:12:55,480 Speaker 1: echoes a common criticism from opponents of the student loan program, 218 00:12:55,520 --> 00:12:59,280 Speaker 1: who argues it punishes Americans who couldn't afford college or 219 00:12:59,400 --> 00:13:03,400 Speaker 1: worked hard to pay off their loans. Here's Justice Neil 220 00:13:03,480 --> 00:13:06,520 Speaker 1: Gorsage on that point. What I think they argue that 221 00:13:06,679 --> 00:13:10,240 Speaker 1: is missing is cost to other persons in terms of fairness, 222 00:13:10,320 --> 00:13:15,079 Speaker 1: for example, people who've paid their loans, people who don't 223 00:13:15,840 --> 00:13:19,760 Speaker 1: have planned their lives around not seeking loans, and people 224 00:13:19,760 --> 00:13:22,080 Speaker 1: who are not eligible for loans in the first place. 225 00:13:22,520 --> 00:13:25,320 Speaker 1: And that half a trillion dollars is being diverted to 226 00:13:25,400 --> 00:13:28,679 Speaker 1: one group of favored persons over others. So this is 227 00:13:29,040 --> 00:13:32,520 Speaker 1: a conservative trope to use that language, but it does 228 00:13:32,760 --> 00:13:36,680 Speaker 1: factor here in a particular way. If the Court were 229 00:13:36,800 --> 00:13:40,640 Speaker 1: to take up the merits of the Biden administration decision 230 00:13:40,720 --> 00:13:45,439 Speaker 1: and decide that the Biden administration had the power to cancel, 231 00:13:45,760 --> 00:13:48,080 Speaker 1: then the question would be whether it's decision to cancel 232 00:13:48,120 --> 00:13:50,640 Speaker 1: the debt was, in the words of the Administry of 233 00:13:50,640 --> 00:13:53,800 Speaker 1: Procedure act arbitrary and capricious. And what the Justice is 234 00:13:53,880 --> 00:13:59,240 Speaker 1: noted was that in these declarations of policy announcing the 235 00:13:59,280 --> 00:14:04,240 Speaker 1: cancelation of the debts, there was no recognition or acknowledgement 236 00:14:04,760 --> 00:14:09,679 Speaker 1: of the potential unfairness to those who had gone to 237 00:14:10,080 --> 00:14:13,120 Speaker 1: a less costly school because of the face of the debt, 238 00:14:13,360 --> 00:14:15,559 Speaker 1: or those who had struggled to pay off the debt, 239 00:14:15,920 --> 00:14:19,520 Speaker 1: and that there was at least no recognition of those 240 00:14:19,600 --> 00:14:23,880 Speaker 1: interests in the calculus that was used by the least 241 00:14:23,960 --> 00:14:28,040 Speaker 1: articulated by the Education Department announcing the cancelation. So that 242 00:14:28,200 --> 00:14:32,480 Speaker 1: issue would arise only if the court decided that the 243 00:14:32,600 --> 00:14:35,880 Speaker 1: Education Department had the power to issue a cancelation, and 244 00:14:35,920 --> 00:14:38,400 Speaker 1: then they would just decide whether that was fair. And 245 00:14:38,480 --> 00:14:42,360 Speaker 1: they might say that because the Biden administration didn't articulate 246 00:14:42,360 --> 00:14:46,120 Speaker 1: the concerns that could be raised by people who weren't benefited, 247 00:14:46,240 --> 00:14:49,400 Speaker 1: such as the two plaintiffs in the second companion case, 248 00:14:49,640 --> 00:14:53,160 Speaker 1: that the whole cancelation should be dismissed for being arbitrary 249 00:14:53,160 --> 00:14:56,720 Speaker 1: and capricious. If they do that, that would leave open 250 00:14:57,560 --> 00:15:02,280 Speaker 1: the path for the Education Department go back and announce 251 00:15:02,320 --> 00:15:07,360 Speaker 1: again anew the cancelation, only this time addressing the concerns 252 00:15:07,480 --> 00:15:11,040 Speaker 1: of those who weren't benefited, and just to find the 253 00:15:11,120 --> 00:15:14,280 Speaker 1: line drawing that the Education Department had to do in 254 00:15:14,360 --> 00:15:18,120 Speaker 1: deciding who should get their loans canceled and who like 255 00:15:18,280 --> 00:15:20,400 Speaker 1: me who paid off their loans years and years ago, 256 00:15:20,600 --> 00:15:23,800 Speaker 1: would not get any kind of reimbursement. Hours and hours 257 00:15:23,800 --> 00:15:26,880 Speaker 1: of oral arguments becoming even harder to tell what's going 258 00:15:26,920 --> 00:15:30,840 Speaker 1: on with these cases. But do you see even the 259 00:15:30,880 --> 00:15:35,160 Speaker 1: possibility of five justices forget the standing issue, who would 260 00:15:35,200 --> 00:15:39,440 Speaker 1: vote to uphold the student loan forgiveness program. I think 261 00:15:39,440 --> 00:15:42,480 Speaker 1: that the court might be fractured. It's possible that there 262 00:15:42,480 --> 00:15:46,280 Speaker 1: would be some justices saying this is an excessive delegation 263 00:15:46,480 --> 00:15:49,240 Speaker 1: or the major question SOCTA and would apply, and therefore 264 00:15:49,480 --> 00:15:53,520 Speaker 1: the bide administration policy must be rescinded. There's some who'd say, well, 265 00:15:53,920 --> 00:15:57,800 Speaker 1: there was a targeted emergency type of delegation to the 266 00:15:57,920 --> 00:16:01,920 Speaker 1: Education Department. We should allow the Education Department to proceed, 267 00:16:02,280 --> 00:16:04,920 Speaker 1: but it has to do so in a measured, thoughtful way. 268 00:16:05,320 --> 00:16:08,440 Speaker 1: And because they didn't give concern to the people who 269 00:16:08,440 --> 00:16:11,560 Speaker 1: would feel frustrated and left out of this cancelation program, 270 00:16:11,840 --> 00:16:14,040 Speaker 1: that the administration has to go back and do it again. 271 00:16:14,240 --> 00:16:17,200 Speaker 1: That kind of fracture we saw in the Docker case 272 00:16:17,480 --> 00:16:20,200 Speaker 1: a couple of terms ago. The Docker case, what the 273 00:16:20,240 --> 00:16:22,080 Speaker 1: court said was Okay, you have the power to do this, 274 00:16:22,440 --> 00:16:26,080 Speaker 1: but you didn't really have a complete enough explanation about 275 00:16:26,120 --> 00:16:30,920 Speaker 1: all the factors. And so the Chief Justice was invoking 276 00:16:31,040 --> 00:16:33,040 Speaker 1: that case in that approach to say, Okay, if you 277 00:16:33,120 --> 00:16:35,480 Speaker 1: had the power, the least you had to consider the 278 00:16:35,520 --> 00:16:38,400 Speaker 1: fairness and the impact on thitter parties, and they would 279 00:16:38,400 --> 00:16:41,160 Speaker 1: send it back. And so there may be that kind 280 00:16:41,320 --> 00:16:43,320 Speaker 1: of alliance, and I do think there'll be a couple 281 00:16:43,360 --> 00:16:47,000 Speaker 1: of justices and maybe even as you mentioned Justice Barrett, 282 00:16:47,040 --> 00:16:51,040 Speaker 1: who decides there's certainly no standing in this case. If 283 00:16:51,040 --> 00:16:55,040 Speaker 1: the Justice's rule against the student loan program, well, that 284 00:16:55,240 --> 00:16:59,840 Speaker 1: amplify frustrations that many Americans have with the Supreme Court 285 00:17:00,080 --> 00:17:05,639 Speaker 1: that continues to interfere in these major political decisions and 286 00:17:06,400 --> 00:17:09,560 Speaker 1: seems to be out of step with the majority of Americans. 287 00:17:10,280 --> 00:17:14,600 Speaker 1: I think there'll be a continued wave of frustration, perhaps 288 00:17:14,640 --> 00:17:18,640 Speaker 1: anger at the Supreme Court for its willingness to curtail 289 00:17:18,680 --> 00:17:22,040 Speaker 1: the operations of the executive branch. And indeed there may 290 00:17:22,040 --> 00:17:25,160 Speaker 1: be some political fallout, and this may give President Biden 291 00:17:25,560 --> 00:17:28,439 Speaker 1: more of another kind of argument to use in his 292 00:17:28,560 --> 00:17:32,720 Speaker 1: reelection campaign, showing people that, hey, what administration does is 293 00:17:32,720 --> 00:17:36,040 Speaker 1: really important people's lives, and so therefore you should give 294 00:17:36,040 --> 00:17:40,000 Speaker 1: me another four years. That may happen as well. Let's 295 00:17:40,040 --> 00:17:43,639 Speaker 1: talk for a moment again about the Major Questions doctrine. 296 00:17:43,880 --> 00:17:47,480 Speaker 1: It was the Roberts Court that established that doctrine. The 297 00:17:47,560 --> 00:17:51,920 Speaker 1: Roberts Court established it. There was reference to earlier cases 298 00:17:52,080 --> 00:17:55,840 Speaker 1: in which the Roberts Courts had articulated the Major Questions doctrine. 299 00:17:56,119 --> 00:17:59,320 Speaker 1: Justice Scalia was one of the first two articulated and 300 00:18:00,000 --> 00:18:02,280 Speaker 1: a sort of a single point. And then since that 301 00:18:02,359 --> 00:18:07,640 Speaker 1: time more courses systematically referenced it, and now it's known 302 00:18:07,640 --> 00:18:09,879 Speaker 1: and basically you can look at the Major Questions in 303 00:18:09,920 --> 00:18:12,960 Speaker 1: a variety of ways. At its most appealing, which many 304 00:18:12,960 --> 00:18:15,080 Speaker 1: people don't agree with it, but at its most appealing, 305 00:18:15,480 --> 00:18:17,359 Speaker 1: the major question. Doctor and says, Look, if we're not 306 00:18:17,480 --> 00:18:22,600 Speaker 1: sure that Congress gave the agency this authority and the 307 00:18:22,640 --> 00:18:27,240 Speaker 1: agency's action would chart a whole new path in terms 308 00:18:27,320 --> 00:18:31,600 Speaker 1: of social and economic policy, we should read the delegation narrowly. 309 00:18:32,000 --> 00:18:35,679 Speaker 1: But I think, as the so called liberal justices noted 310 00:18:35,800 --> 00:18:39,840 Speaker 1: in this case, we know what the Congress did. Congress 311 00:18:39,920 --> 00:18:42,479 Speaker 1: wanted to give the head of the Department of Education 312 00:18:42,560 --> 00:18:46,360 Speaker 1: the authority to deal with an emergency, and so it's 313 00:18:46,440 --> 00:18:49,200 Speaker 1: not like charting a new path. It's not like being 314 00:18:49,680 --> 00:18:52,679 Speaker 1: an activist. They're just trying to interpret the powers that 315 00:18:52,840 --> 00:18:58,280 Speaker 1: Congress gave him, and in this case, to cancel at 316 00:18:58,359 --> 00:19:01,160 Speaker 1: least part of the student loan debt that twenty five 317 00:19:01,240 --> 00:19:04,919 Speaker 1: or forty million people in the United States has. There's 318 00:19:04,920 --> 00:19:09,520 Speaker 1: an interesting argument under the Major Questions doctrine. During the discussion, 319 00:19:09,680 --> 00:19:13,200 Speaker 1: the point was raised about whether it is less risky 320 00:19:13,280 --> 00:19:15,800 Speaker 1: for Congress to give a great deal of power to 321 00:19:15,840 --> 00:19:20,320 Speaker 1: administrative agencies in administering benefits programs as opposed to in 322 00:19:20,359 --> 00:19:24,960 Speaker 1: regulating The thought underlying that discussion was, if you're just 323 00:19:25,000 --> 00:19:28,879 Speaker 1: talking about merits, you're not giving the ability administration to 324 00:19:28,920 --> 00:19:33,320 Speaker 1: regulate new areas, to compromise new kinds of economies at all. 325 00:19:33,400 --> 00:19:36,880 Speaker 1: All you're suggesting is whether to tinker with a program 326 00:19:36,920 --> 00:19:41,120 Speaker 1: that Congress clearly established, and even if it's canceled, then 327 00:19:41,119 --> 00:19:45,639 Speaker 1: you're not necessarily again changing the economies of industries. And 328 00:19:45,720 --> 00:19:50,080 Speaker 1: so from that perspective, a number of justices echoed that thought, 329 00:19:50,160 --> 00:19:54,800 Speaker 1: as did this listener general that a delegation of the 330 00:19:54,880 --> 00:19:58,080 Speaker 1: power to limit a marriage program. It could be Social Security, 331 00:19:58,200 --> 00:20:01,000 Speaker 1: or it could be here education loan is a lot 332 00:20:01,119 --> 00:20:05,119 Speaker 1: less dangerous, and therefore the major questions doctor should not 333 00:20:05,160 --> 00:20:08,000 Speaker 1: apply as fully as opposed to when we're talking about 334 00:20:08,040 --> 00:20:11,800 Speaker 1: regulating new authorities such as carbon emissions. Well, we'll have 335 00:20:11,840 --> 00:20:15,640 Speaker 1: to keep guessing about what happens until perhaps as late 336 00:20:15,680 --> 00:20:18,440 Speaker 1: as June when they come down with their final decisions 337 00:20:18,480 --> 00:20:21,879 Speaker 1: of the term. Thanks so much, Hal, that's professor Harold 338 00:20:21,920 --> 00:20:26,680 Speaker 1: Krent of the Chicago Kent College of Law. The Supreme 339 00:20:26,720 --> 00:20:30,919 Speaker 1: Court will once again weigh the Consumer Financial Protection Bureau's fate, 340 00:20:31,359 --> 00:20:36,159 Speaker 1: focusing on whether the agency's independent funding violates the Constitution. 341 00:20:36,760 --> 00:20:39,159 Speaker 1: This week, the High Court elected to hear the Biden 342 00:20:39,160 --> 00:20:43,160 Speaker 1: administration's appeal of an October decision from the US Court 343 00:20:43,200 --> 00:20:46,400 Speaker 1: of Appeals for the Fifth Circuit that found the agency's 344 00:20:46,480 --> 00:20:51,560 Speaker 1: independent funding through the Federal Reserve was unconstitutional. A ruling 345 00:20:51,640 --> 00:20:54,840 Speaker 1: upholding the Fifth Circuits finding would wreak havoc on the 346 00:20:54,880 --> 00:20:59,240 Speaker 1: agency's operations. At the very least, the CFPB would find 347 00:20:59,280 --> 00:21:03,359 Speaker 1: paying bills difficult, and its prior rules, enforcement actions, and 348 00:21:03,400 --> 00:21:08,200 Speaker 1: settlements could become potentially invalid. Joining me is Alan Denson 349 00:21:08,280 --> 00:21:11,240 Speaker 1: a partner. It's struck and struck in Levan. The Fifth 350 00:21:11,280 --> 00:21:16,199 Speaker 1: Circuit Court of Appeals throughout never enforced pay day lending 351 00:21:16,320 --> 00:21:20,320 Speaker 1: rule explain why it did that, what its reasoning was. 352 00:21:20,760 --> 00:21:23,280 Speaker 1: Put it into one sentence. It has to do with 353 00:21:23,359 --> 00:21:26,560 Speaker 1: the unification of the purse and the sword, and that 354 00:21:26,640 --> 00:21:31,879 Speaker 1: actually comes from directly from the opinion itself. And what 355 00:21:32,119 --> 00:21:39,080 Speaker 1: that phrase covers is this idea that Congress, through appropriations 356 00:21:39,160 --> 00:21:43,760 Speaker 1: and the executive should not be under one hell, so 357 00:21:43,920 --> 00:21:47,800 Speaker 1: an executive agency should not be able to fund itself, 358 00:21:48,520 --> 00:21:54,119 Speaker 1: and that is what the FSA was able to successfully 359 00:21:54,280 --> 00:21:58,879 Speaker 1: argue and convents. The fifth circuit of is that it's 360 00:21:58,920 --> 00:22:02,239 Speaker 1: improper for an agency to be able to set its 361 00:22:02,320 --> 00:22:06,120 Speaker 1: budget and determine what it's funding. Is that power belongs 362 00:22:06,160 --> 00:22:09,600 Speaker 1: to the Congress under Article one of the Constitution, and 363 00:22:09,920 --> 00:22:14,159 Speaker 1: that violates separation of powers principle. That's the reasoning and 364 00:22:14,760 --> 00:22:17,280 Speaker 1: rationale of that. That's circum in a nutshell. Is that 365 00:22:17,320 --> 00:22:21,280 Speaker 1: a novel legal argument. It is no court has ever 366 00:22:22,160 --> 00:22:27,679 Speaker 1: reached that position before, and it's the bureaus structure is 367 00:22:27,760 --> 00:22:34,240 Speaker 1: also not necessarily novel in comparison to other agencies. In fact, 368 00:22:34,400 --> 00:22:39,679 Speaker 1: there are other financial regulators who are similarly structured like 369 00:22:39,760 --> 00:22:44,000 Speaker 1: the bureau who are not funded through appropriation who have 370 00:22:44,080 --> 00:22:46,960 Speaker 1: a single director. Great example of that would be the 371 00:22:47,000 --> 00:22:50,439 Speaker 1: occ for example, which is a sister regulator of the 372 00:22:50,480 --> 00:22:56,080 Speaker 1: CSPB on the FEC countful. The Bureau is certainly not 373 00:22:57,040 --> 00:23:02,440 Speaker 1: unique in that it is dependently funded and has the 374 00:23:02,440 --> 00:23:06,479 Speaker 1: sole director structure, which is a big thing that Circuit 375 00:23:06,560 --> 00:23:09,120 Speaker 1: seems to take issue with. I think what does make 376 00:23:09,160 --> 00:23:13,280 Speaker 1: them unique is that they're able to request a budget 377 00:23:13,480 --> 00:23:17,520 Speaker 1: of an up to amount. That's unique, But that not 378 00:23:17,920 --> 00:23:21,720 Speaker 1: the reason why the Fifth Circuit says it reached a decision. 379 00:23:22,040 --> 00:23:24,720 Speaker 1: It really has to do with this fundamental structure that 380 00:23:25,160 --> 00:23:28,280 Speaker 1: the Circuit beliefs, or the panel beliefs that an agency 381 00:23:28,920 --> 00:23:32,919 Speaker 1: should not be independent outside of congressional appropriation. So the 382 00:23:33,040 --> 00:23:37,399 Speaker 1: Fifth Circuit thinks that the funding scheme for the CFPB 383 00:23:37,760 --> 00:23:42,080 Speaker 1: is unconstitutional. That's right. Are there any other circuit courts 384 00:23:42,080 --> 00:23:46,400 Speaker 1: who've ruled on this and come to different conclusions? Yeah, 385 00:23:46,520 --> 00:23:50,040 Speaker 1: the DC Circuit early in the Bureau's history, ruled on it, 386 00:23:50,480 --> 00:23:55,399 Speaker 1: and the Ninth Circuit I believe, has also ruled on 387 00:23:55,440 --> 00:23:58,760 Speaker 1: that argument. So there is a flood. What does it 388 00:23:58,800 --> 00:24:01,320 Speaker 1: tell you that the Supreme Court declined to put this 389 00:24:01,400 --> 00:24:06,520 Speaker 1: case on an expedited schedule, as the administration asked, I 390 00:24:06,640 --> 00:24:10,560 Speaker 1: think that it means this THESPB is going to face 391 00:24:11,040 --> 00:24:14,520 Speaker 1: continued uncertainty. I think that that's a bad sign for 392 00:24:14,600 --> 00:24:20,399 Speaker 1: the agency, and I do think that they're going to 393 00:24:20,480 --> 00:24:23,960 Speaker 1: give this ruling a really close look. I mean, the 394 00:24:24,040 --> 00:24:28,560 Speaker 1: Court in its current form has done taking a hard 395 00:24:28,600 --> 00:24:35,480 Speaker 1: look at the administrative enforcement regime on multiple front in 396 00:24:35,520 --> 00:24:39,760 Speaker 1: recent terms, whether it be the Federal Trade Commission, whether 397 00:24:39,800 --> 00:24:44,679 Speaker 1: it be the EPA. Through this Major Questions doctrine that 398 00:24:44,760 --> 00:24:49,600 Speaker 1: was decided last year, they're really a fresh look being 399 00:24:49,600 --> 00:24:53,200 Speaker 1: taken at some of the things that those of us 400 00:24:53,280 --> 00:24:57,520 Speaker 1: in government enforcement work have taken for granted for decades. 401 00:24:58,720 --> 00:25:01,760 Speaker 1: The Solicitor General said the ruling has affected more than 402 00:25:01,840 --> 00:25:06,480 Speaker 1: half the bureau's twenty two enforcement cases, giving defendants an 403 00:25:06,560 --> 00:25:10,360 Speaker 1: argument for dismissal, and threatens the validity of virtually all 404 00:25:10,440 --> 00:25:15,639 Speaker 1: past CFPB actions. Can you explain what she means there? Well, 405 00:25:15,720 --> 00:25:20,919 Speaker 1: if the bureau is unconstitutional and its funding, it means 406 00:25:21,000 --> 00:25:25,840 Speaker 1: that every action it is taking as a result of 407 00:25:25,840 --> 00:25:30,320 Speaker 1: that funding is problematic and as an ultra virea's act, 408 00:25:30,960 --> 00:25:37,760 Speaker 1: So that would mean current rulemakings are invalid because those 409 00:25:37,920 --> 00:25:41,960 Speaker 1: are prepared by CFPB staff members who are funded outside 410 00:25:41,960 --> 00:25:46,119 Speaker 1: of the congressional appropriations process. It would mean that past 411 00:25:46,320 --> 00:25:51,800 Speaker 1: settlements that companies entered into were shepherded along, were forced 412 00:25:51,800 --> 00:25:58,080 Speaker 1: along by by employees who are funded outside of congressional 413 00:25:58,080 --> 00:26:03,760 Speaker 1: appropriation and and it means that current investigations are funded 414 00:26:04,240 --> 00:26:08,840 Speaker 1: illegally in the fifth circuits to view and so there 415 00:26:08,880 --> 00:26:11,919 Speaker 1: really is not anything that the Bureau can do that 416 00:26:12,080 --> 00:26:16,200 Speaker 1: doesn't require the expenditure of funds. Did the Solicitor General 417 00:26:16,320 --> 00:26:20,840 Speaker 1: ask for this decision to be held in abeyance until 418 00:26:20,880 --> 00:26:25,119 Speaker 1: the Supreme Court decides? Or are defendants going to start, 419 00:26:25,359 --> 00:26:29,640 Speaker 1: you know, arguing that this ruling allows dismissal of their cases. 420 00:26:30,840 --> 00:26:34,800 Speaker 1: Virtually every defendant who is in litigation right now with 421 00:26:34,920 --> 00:26:39,360 Speaker 1: the CSPB and plenty of others who are in investigations 422 00:26:39,400 --> 00:26:42,639 Speaker 1: are already making that argument, whether they're in the Fifth 423 00:26:42,640 --> 00:26:48,119 Speaker 1: Circuit or not. And so it really does affect everything 424 00:26:48,160 --> 00:26:52,000 Speaker 1: the Bureau is doing from an enforcement posture, because if 425 00:26:52,000 --> 00:26:56,719 Speaker 1: you're a defendant in one of these investigations or or litigation, 426 00:26:57,320 --> 00:27:00,639 Speaker 1: people people want to bring every defend to their side 427 00:27:00,640 --> 00:27:03,360 Speaker 1: that they can and and this is certainly one that 428 00:27:03,520 --> 00:27:07,159 Speaker 1: is that is live and is currently problematic for the bureau. 429 00:27:08,200 --> 00:27:11,840 Speaker 1: Will that be part of the Supreme Court's consideration the 430 00:27:12,000 --> 00:27:16,000 Speaker 1: number of cases that could be affected by this, I'm 431 00:27:16,040 --> 00:27:18,520 Speaker 1: not sure. I mean, they could either take of a 432 00:27:18,560 --> 00:27:23,240 Speaker 1: real politic approach that would that would be looking for 433 00:27:23,320 --> 00:27:28,399 Speaker 1: a practical result. You know, we've already got rules in 434 00:27:28,520 --> 00:27:32,160 Speaker 1: place and settlements that have happened and employees that have 435 00:27:32,160 --> 00:27:37,000 Speaker 1: been paid. Um, you know, we can't really unwine that. 436 00:27:37,119 --> 00:27:41,080 Speaker 1: So what find the middle ground? Or the Court could also, 437 00:27:41,600 --> 00:27:46,800 Speaker 1: um say, we have a really important philosophical point that 438 00:27:47,040 --> 00:27:50,000 Speaker 1: we want to express here, and we're bound by the 439 00:27:50,040 --> 00:27:54,920 Speaker 1: Constitution and we're interpreting the Constitution, and so we're not 440 00:27:55,040 --> 00:27:58,600 Speaker 1: going to change our ruling based on what the consequences 441 00:27:58,600 --> 00:28:00,919 Speaker 1: would be. And so they're I think there's kind of 442 00:28:00,920 --> 00:28:04,400 Speaker 1: two approaches there. It's unclear what the what the Court 443 00:28:04,440 --> 00:28:08,760 Speaker 1: would do. So the Court could say the Fifth Circuit 444 00:28:08,960 --> 00:28:13,760 Speaker 1: is correct, and that would mean the end of the CFPB. 445 00:28:15,600 --> 00:28:21,880 Speaker 1: Not necessarily. They could say the Fifth Circuit is correct, 446 00:28:22,160 --> 00:28:26,840 Speaker 1: and we're going to rewrite the statute. We're going to 447 00:28:26,960 --> 00:28:32,120 Speaker 1: strike the portion of the Dot Frank Act that how 448 00:28:32,200 --> 00:28:36,800 Speaker 1: the CFCB is funded, and and then that would make 449 00:28:36,840 --> 00:28:40,760 Speaker 1: them subject to congressional appropriation. They I mean they could, 450 00:28:40,880 --> 00:28:45,160 Speaker 1: they could effectively rewrite the statute and that's certainly within 451 00:28:46,160 --> 00:28:49,760 Speaker 1: their authority or strike the offending portion. And there's a 452 00:28:49,840 --> 00:28:53,120 Speaker 1: severability clause and the DoD Frank Act which which would 453 00:28:53,160 --> 00:28:57,400 Speaker 1: allow that. So the Supreme Court already dealt one major 454 00:28:57,480 --> 00:29:01,880 Speaker 1: blow to the CFPB's independent in twenty twenty. Remind us 455 00:29:01,920 --> 00:29:05,800 Speaker 1: about that. So it's it's the sail law case, and 456 00:29:06,120 --> 00:29:09,520 Speaker 1: it had to do with the removability of the director 457 00:29:09,520 --> 00:29:13,000 Speaker 1: of the CSCB, which, as I mentioned before, the single director. 458 00:29:13,160 --> 00:29:18,720 Speaker 1: There's not a commission, and that's the sole political appointee 459 00:29:18,720 --> 00:29:24,000 Speaker 1: in the office. And the Court in that case ruled 460 00:29:24,200 --> 00:29:27,480 Speaker 1: that a provision in the dot Frank Act that allowed 461 00:29:27,600 --> 00:29:33,080 Speaker 1: the CSCB director to be removed only for cause. They 462 00:29:33,200 --> 00:29:38,440 Speaker 1: said that that portion was offensive to the Constitution, again 463 00:29:38,600 --> 00:29:43,760 Speaker 1: violating separation of powers doctrine, and struck that from the 464 00:29:43,840 --> 00:29:49,680 Speaker 1: statute and that now the CSTB Director here forward will 465 00:29:49,720 --> 00:29:55,280 Speaker 1: be removable at will, and and it became immediately effective. 466 00:29:55,840 --> 00:29:59,280 Speaker 1: You referred to this before, But could this case have 467 00:29:59,440 --> 00:30:03,880 Speaker 1: implicated nations for the Federal Reserve Board, the FDIC, and 468 00:30:04,000 --> 00:30:08,520 Speaker 1: the Controller of the Currency. It could I mean if 469 00:30:08,520 --> 00:30:14,800 Speaker 1: the Court UM right a very broad opinion UM and 470 00:30:15,520 --> 00:30:20,480 Speaker 1: similar language to the Fifth Circuit, that could be used 471 00:30:20,480 --> 00:30:26,320 Speaker 1: to argue against the the OCC, FED, FDIC, who have 472 00:30:26,520 --> 00:30:31,800 Speaker 1: similar funding structures. UM. The one thing that differentiates the 473 00:30:32,760 --> 00:30:38,120 Speaker 1: FED and the FDIC is that they are they have 474 00:30:38,200 --> 00:30:43,680 Speaker 1: governing bodies, either a board or commissions and UM. And 475 00:30:44,120 --> 00:30:48,000 Speaker 1: that's different from the OCC and CFCB, who have single 476 00:30:48,240 --> 00:30:53,280 Speaker 1: director structures. But UM. But that that is one way 477 00:30:53,320 --> 00:30:56,720 Speaker 1: that the Court could rule. And the Court could also 478 00:30:57,520 --> 00:31:01,720 Speaker 1: just make a very narrow decision that would go against 479 00:31:01,800 --> 00:31:07,360 Speaker 1: the CFPB specifically, would find something unique about the bureau 480 00:31:07,520 --> 00:31:10,440 Speaker 1: and in limit it's ruling to that, or it could say, 481 00:31:11,800 --> 00:31:14,880 Speaker 1: you know, we we think this was wrongly decided, and 482 00:31:15,880 --> 00:31:19,280 Speaker 1: we're not going to say anything about the other agencies, 483 00:31:19,360 --> 00:31:22,560 Speaker 1: but we know that this case against the CFPB was 484 00:31:22,600 --> 00:31:27,520 Speaker 1: wrongly decided. Finally, will this case be a test of 485 00:31:28,160 --> 00:31:32,360 Speaker 1: how far the justices are willing to go to constrain 486 00:31:32,560 --> 00:31:38,000 Speaker 1: the so called administrative state? I do think so, but 487 00:31:38,360 --> 00:31:43,640 Speaker 1: I don't think it's the furthest that the Court has 488 00:31:43,680 --> 00:31:47,520 Speaker 1: been asked to go. I mean the West Virginia versus 489 00:31:47,560 --> 00:31:51,840 Speaker 1: EPA case, and this this major questions doctrine that was 490 00:31:51,880 --> 00:31:55,240 Speaker 1: developed in the last term was a was a pretty 491 00:31:55,280 --> 00:31:59,920 Speaker 1: far it was a pretty far out there opinion in decision. 492 00:32:00,280 --> 00:32:05,400 Speaker 1: And I don't think that any of us in the 493 00:32:05,440 --> 00:32:09,080 Speaker 1: consumer financial services bar that follows this kind of thing. 494 00:32:10,280 --> 00:32:12,880 Speaker 1: It's all that happening. And I think that there's a 495 00:32:12,880 --> 00:32:19,400 Speaker 1: lot of application of that case to CFPB and financial 496 00:32:19,520 --> 00:32:23,959 Speaker 1: regulator type positions, and I think you'll see more of 497 00:32:24,000 --> 00:32:30,840 Speaker 1: those challenges coming. So I think that West Virginia versus EPA, 498 00:32:31,400 --> 00:32:37,239 Speaker 1: perhaps it's a bigger opinion than whatever comes out of 499 00:32:37,240 --> 00:32:43,680 Speaker 1: this SA case and we'll have longer reaching implications. Thanks 500 00:32:43,680 --> 00:32:46,320 Speaker 1: for being on the Bloomberg Law Show. Alan, that's Alan 501 00:32:46,400 --> 00:32:49,360 Speaker 1: Denson a partner, It's Struck and Struck in Levan and 502 00:32:49,360 --> 00:32:51,520 Speaker 1: that's it for this edition of the Bloomberg Law Show. 503 00:32:51,880 --> 00:32:54,160 Speaker 1: Remember you can always get the latest legal news on 504 00:32:54,240 --> 00:32:58,520 Speaker 1: our Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify, 505 00:32:58,720 --> 00:33:03,760 Speaker 1: and at www dot Bloomberg dot com, slash podcast Slash Law, 506 00:33:04,160 --> 00:33:06,320 Speaker 1: and remember to tune in to The Bloomberg Law Show 507 00:33:06,440 --> 00:33:09,920 Speaker 1: every week night at ten pm Wall Street Time. I'm 508 00:33:10,000 --> 00:33:12,480 Speaker 1: June Grosso and you're listening to Bloomberg