ARA reacts to Supreme Court overturning Chevron Doctrine
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The American Recovery Association board sent an industry message this week, reacting to the Supreme Court’s 6-3 decision overturning what’s been widely known in legal circles as the Chevron Doctrine.
ARA first gave a brief explanation of what the Chevron Doctrine was.
“Courts had to apply a two-part test in assessing the actions of federal agencies,” ARA wrote in its message. “If the statute adopted by Congress was clear on the issue before the court, the court had to follow congressional intent.
“However, if the statute was ambiguous on, or simply did not address, the issue before the court, the court had to defer to the agency’s interpretation as long as it was reasonable, even though the court would have reached a different interpretation,” ARA continued.
“With the overruling of the Chevron Doctrine, going forward, generally courts should no longer give mandatory deference to a regulation (either an existing regulation or one promulgated in the future) by a federal agency empowered by Congress to issue regulations under a federal statute,” the association continued.
What does this decision mean for auto financing and vehicle repossessions? Here’s what ARA’s board said about the Supreme Court opinion that the agent body indicated is based entirely on Section 7 of the Administrative Procedure Act (APA).
“Section 7 specifies that courts, not agencies, will decide ‘all relevant questions of law’ arising on review of an agency regulation,” ARA wrote. “Clearly, the opinion will jeopardize the ability of agencies to promulgate regulations that will likely be upheld by the courts.
“It is more likely that, going forward, regulations will be challenged either directly in an action against the agency under the APA, or collaterally in a private lawsuit against a defendant whose defense is that it relied on and complied with an agency regulation,” the association continued.
“While the demise of Chevron is important for all federal agency actions, the CFPB (Consumer Financial Protection Bureau) may face more consequences than many other agencies, given its aggressiveness in interpreting federal statutes and pushing the envelope with respect to its own authority,” ARA went on to say. “It also opens the door for an avalanche of lawsuits challenging regulations directly or in private lawsuits.”