The Regulatory Week in Review: June 3, 2016
IN THE NEWS
- The Consumer Financial Protection Bureau (CFPB) proposed a rule that would require the payday loan industry—providers of short-term loans with very high interest rates—to confirm that their customers can afford to repay loans before lending, a move that the CFPB says is necessary to protect consumers from falling into “debt traps,” but that is opposed by the payday loan industry, which fears that the rule could force lenders, many of which are small businesses, to shut down.
- The U.S. Supreme Court unanimously decided in U.S. Army Corps of Engineers v. Hawkes Co., Inc. that a determination by the Army Corps of Engineers that a body of water falls under federal jurisdiction and is therefore subject to the Clean Water Act’s permit requirements can be appealed directly to the federal court system. The Court’s holding that a Corps’ determination constitutes a final agency action is seen as a win for opponents of the permits, as it is expected to decrease executive control over property rights.
- The U.S. Fish and Wildlife Service (FWS) released a final rule that places a near-total ban on the commercial trade of ivory from African elephants, making exceptions only for genuine antiques and existing musical instruments containing very small amounts of ivory—a move that comes after the proposed rule received the second-most comments of any FWS proposal in history, and which is supported by wildlife conservation advocates, who believe the rule will reduce wildlife trafficking.
- In a challenge by Lynn Tilton, an investment adviser who the SEC has charged with fraud, to the constitutionality of the U.S. Securities and Exchange Commission’s (SEC) administrative law judges, the U.S. Court of Appeals for the Second Circuit ruled that Tilton cannot bring her constitutional claim until there has been a final decision in the administrative case against her—a ruling that, for now, supports the SEC’s policy of pursuing fraud cases through its internal administrative proceedings rather than in federal court.
- The Federal Communications Commission (FCC) commenced the first part of a major wireless spectrum auction by soliciting bids for prices at which television broadcasters would be willing to sell full or partial access to spectrum to the FCC. The second part of the auction will consist of transitioning and repackaging the spectrum, then reselling it to wireless service providers to help meet the growing demand for wireless data.
- In a blow to Obama Administration-backed “accountable care organizations,” which aim to improve and reduce the cost of healthcare by coordinating treatment for patients, the Internal Revenue Service (IRS) issued a ruling that denied tax-exempt status to one such accountable care organization. The agency reasoned that since the organization did not operate solely for a charitable purpose and provided some benefits to affiliated doctors, it was ineligible for the exemption, but a former IRS Healthcare Counsel described the ruling as contrary to a contemporary trend in favor of community-focused healthcare policies.
- In a move aimed at reducing Americans’ salt intake, the Food and Drug Administration (FDA) promulgated voluntary guidelines recommending sodium reductions in the food industry’s products—the FDA argued that it is difficult for many Americans to reduce their salt intake because “the majority of sodium intake comes from processed and prepared foods,” but the Salt Institute countered that the government “disregarded” years of scientific research that indicates that low-sodium diets can place people at risk for a host of medical conditions.
- The Department of Justice (DOJ) appealed a federal judge’s order that would force DOJ attorneys to take ethics courses, a measure that arose out of alleged misrepresentations made by government lawyers in a case involving President Obama’s Deferred Action for Parents of Americans (DAPA) program. The DOJ argued in the appeal that the order “exceeded” the court’s inherent power and encroached on core functions of the Executive Branch.
WHAT WE’RE READING THIS WEEK
- In a piece for The Hill, Melanie Zanona discussed the management errors behind the recent, well-documented airport security debacles that have caused hours-long lines, reportedly leading to more than 70,000 passengers missing flights on a single airline alone. The failures are being attributed primarily to large staffing cuts made by the Transportation Security Administration (TSA) in reliance on what turned out to be a dramatic overestimate of the success its PreCheck program would have. Despite these failings, the TSA has remained confident that it will be able to create a better security system through further development and promotion of risk-based security initiatives like PreCheck. Many lawmakers do not share in this confidence, with some, such as Rep. Darrell Issa (R-CA) arguing that the TSA should be taken “out of the airport screening business altogether.”
- The think tank Third Way published a report assessing student outcomes at four-year, non-profit colleges and found what it described as “institutional failure” in providing an education “worthy of the time and cost associated with it.” Specifically, the study discovered that only 55 percent of first-time, full-time students graduate within six years, only 16 percent of schools have completion rates higher than 75%, and that wage outcomes for students with educational loans are low. Among its recommendations, the report proposed that colleges formulate plans to increase student completion rates and encourage high-performing schools to accept more lower-income students.
- In a story co-published by ProPublica and the Washington Post, reporter Charles Ornstein examined how doctors, in responding to negative Yelp reviews, sometimes reveal patient health information and appear to be in violation of the Health Insurance Portability and Accountability Act (HIPAA). In a search of over 1.7 million Yelp reviews, ProPublica found that more than 3,500 one-star reviews of doctors by patients mentioned privacy or HIPAA, and that in “dozens of instances, responses to complaints about medical care turned into disputes over patient privacy.”