Judge Neil Gorsuch


Although I am not quite familiar with Judge Gorsuch’s scholarship or opinions, I have combed the opinions of the academics whom I trust to get a sense of his reputation.  The opinion is unanimous among both liberal and conservative professors – Judge Gorsuch is an intelligent, distinguished jurist of integrity who will perform an admirable job as a Supreme Court Justice.

However, there is one element of his record which gives me pause, and that is his opinion on Chevron deference.  Each opinion in itself is reasonable.  And he does make a compelling argument for allowing judicial precedent take priority over agency procedures.  However, it does deviate from the overal tradition of the court to give deference to settled SCOTUS precedent.  Chevron has been settled law for decades now.  It is one of the bedrocks of administrative law.  Overturning this case will inevitably also overturn legions of its progeny.

And, of course, that will also affect the Federal Trade Commission and the Consumer Finance Protection Bureau.  As it would all agencies.

Of course, first he has to be confirmed.  If and when he is, he would need the support of four other justices, and the right case, to actually make headway on narrowing or even reversing Chvron (the latter being something I see the other Justices being reluctant to do).  At the very least, Robert’s penchant for narrow holdings may control, and we could see the Court chip away at agency deference rather than make sweeping changes.

I should also mention here that there are rumors that President Trump would like to reverse the Board of Labor’s rule that financial advisors must act as fiduciaries to their clients, also known as the Fiduciary Rule.  At this point it is only a rumor, but it is something those of us interested in consumer protection and finance will be watching quite closely.  The Rule just went into effect January 1, so it will be a shame if it is not given the time to be field-tested and see how it affects consumers.

Arbitration Ageement Challenged in Wells Fargo Case


Recently, Wells Fargo opened up to 2 million deposit and credit-card accounts in customers’ names without their permission. Often, customers learned of these accounts only after they began accumulating fees.

The CPFB issued a $100 million penalty against the bank, and a class action suit is pending.  It has also agreed to refund the charged fees.  However, it filed a motion in District Court to dismiss the case as per an arbitration agreement.

The CFPB is considering rules that would prohibit some financial institutions from forcing consumers into arbitration, and contracts which require customers to waive their right to class action lawsuits.  However, as discussed earlier this week, changes in agency leadership that result from the new legislation may prevent such a rule from being enacted.

California Bag Ban Upheld


Passed in 2014, Senate Bill 270 is a California law that limited the types of stores that could give customers single-use plastic bags.  In the recent election, a referendum attempted to challenge 270, which was suspended pending the outcome.  The referendum was defeated, which means Senate Bill 270 is law in California once again.

Grocery stores, liquor stores, convenience stores, and most types of retailers save clothing-only shops will be required to sell reusable bags to customers.

Court holding on CFPB


A Federal Circuit Court held last week that the structure of the Consumer Financial Protection Bureau is unconstitutional.  It held that the director was improperly granted too much power, and suggested a fix of granting the President the right to terminate the agency’s director.  The decision comes at a key time, as Republican victories in Congress and the White House could enable them to curtail the agency’s power, part of the party’s platform.  However, Richard Cordray, the currect director, cannot currently be removed while the agency’s petition for appeal is pending.

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