The financial regulatory landscape has been one fraught with questions as to how far regulation should, and can, go. Opponents targeting new regulations, The New York Times reported, have claimed that more rules would encroach on separation of powers.
The separation argument has garnered some affirmation from courts in Denver and Washington that have said that parts of Dodd-Frank are unconstitutional. But, said NYT, the declarations by those courts have been brushed aside, as the same bodies have said the agencies overseeing Dodd-Frank should act just as they had been doing before the rulings.
In fact, said NYT, the SEC had been found to be acting with too much power placed with agency adjudicators but could not, in turn, appoint officers, a duty that is the president’s under the Appointments Clause. Elsewhere, the CFPB was found by another court to be too distanced from White House authority. In both those cases, then, the ultimate authority rests with the Oval Office, and the agencies had been acting outside the bonds of the Constitution. But in each example, the courts ruled that simple administrative fixes could be put in place without harming ongoing operations. Said NYT, dismantling huge swaths of government would be difficult, and the agencies, like the SEC, serve vital functions and have done so for decades.
By way of contrast, corporations, said NYT, could instigate checks on regulatory oversight by suing to have those agencies conduct cost-benefit analyses of proposed regulations, which would instead tie up new regulations from quick enactment.