The U.S. Supreme Court Friday overturned the “Chevron doctrine” that has guided courts’ review of challenges to federal agency actions for decades. Chevron—which stems from a 1984 Supreme Court decision—gave federal regulators vast leeway in interpreting the law.
In a 6-3 decision, the court held “the Administrative Procedure Act requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous; Chevron is overruled.”
The court was reviewing two consolidated cases—Loper Bright Enterprises v. Raimondo and Relentless, Inc. V. Department of Commerce—that challenged a rule from the National Marine Fisheries Service.
The court also noted the decision does not call into question prior cases that relied on the Chevron framework, and that the holdings of those cases that specific agency actions are lawful are still valid.
“The Supreme Court’s decision to overturn the Chevron doctrine that required courts to defer to administrative agencies’ interpretations of ambiguous acts of Congress has immense implications for highly regulated entities like credit unions. While agencies, including the NCUA and CFPB, possess subject matter expertise, rulemakings and other agency actions must comply with the Administrative Procedure Act,” said America’s Credit Unions Chief Advocacy Officer Carrie Hunt.
“This decision will have a momentous impact in the rule making process. While agencies’ rules may be easier to overturn, the rule making process itself will likely slow and be more cumbersome. We expect this decision will be both a help and hindrance to credit unions going forward,” she added.
