Document Type
Article
Publication Date
2024
Publication
George Mason Law Review
Volume
31
Abbreviation
Geo. Mason L. Rev.
First Page
265
Abstract
During the New Deal, President Franklin D. Roosevelt declared that the United States was facing a “quiet crisis.” The Supreme Court had struck down his administration’s rules governing the petroleum and poultry industries. Unlike the recent banking panic that had caused the Great Depression, there were “no lines of depositors outside closed banks.” The situation, Roosevelt said, would nonetheless be “far-reaching in its possibilities of injury to America.” The courts ultimately relented, leaving the remainder of the New Deal regulatory settlement largely intact.
Today, the United States confronts another “quiet crisis.” The U.S. banking system has experienced a decade and a half of instability, from the financial crisis in 2008 to the failure of Silicon Valley Bank in 2023. Meanwhile, the Supreme Court’s decision in West Virginia v. EPA has called into question the ability of administrative agencies to address pressing social and economic problems. The Court’s newly established major questions doctrine restricts administrative agencies’ authority to address matters of political or economic importance unless Congress has explicitly enumerated the agency’s authority to regulate the specific issue under consideration.
This Article will argue that the major questions doctrine is a flawed administrative framework that should not be extended to banking law. The major questions doctrine’s bias in favor of narrow, inflexible regulatory authority conflicts with Congress’s desire that banking regulation adapt to the dynamic nature of finance. It also undermines courts’ deference to banking agencies’ policy judgments in recognition of the specialness of banking and bank regulators’ expertise. Applying the major questions doctrine to U.S. banking law demonstrates the doctrine’s unworkability as a matter of administrative law. It also reveals the doctrine’s consequences for the banking system— ranging from increased banking instability and market uncertainty to reduced policymaking predictability and transparency.