SCOTUS Ends Chevron Deference, Severely Restricting Executive Agency Power

In a 6-3 decision along ideological lines, the Supreme Court of the United States (SCOTUS) overruled a longstanding precedent known as the Chevron Deference. The Chevron precedent said that federal agencies, not judges, should interpret federal laws, which bolstered federal agencies’ ability to implement regulations in consumers’ lives. 

“Today’s historic decision will take years to unfold across not just the financial regulatory landscape, but every area where executive agencies impact regulated entities and American consumers,” said Lindsey Johnson, President and CEO of the Consumer Bankers Association, according to Banking Dive. 

Regulatory actions without clear congressional authority will most likely face more challenges. Judges will now interpret the law themselves without deferring to the agencies, which will make it easier to overturn regulations that govern a broad range of American life, including artificial intelligence, cryptocurrency, drugs and medicine, and consumer protections. 

The Hill noted that the move handed a victory to anti-regulatory and conservative interests that have tried to end the precedent, but the Biden administration has defended the precedent before SCOTUS. In 2021, the high court’s conservative majority also ruled that agencies cannot rule on significant issues if there is no “clear congressional authorization.”

The two cases challenged rules by the National Marine Fisheries Service, which said that commercial fishing firms must pay for observers on their vessels. The companies sued, but the lower courts said that the agency had the power to uphold the requirement due to the Chevron precedent. 

According to Consumer Finance Monitor, Justice Elena Kagan wrote in a dissenting opinion that “[s]ome interpretive issues arising in the regulatory context involve scientific or technical subject matter. Agencies have expertise in those areas; courts do not.”