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Mike Konczal

Bankers’ Court Wins Could Come Back to Haunt Them

Banks and their lawyers have found a surprisingly effective way to stymie financial reform: Kill new rules in the courts. It’s a strategy that may cripple regulators, undermine the legitimacy of the judicial system and ultimately come back to haunt the banks.

Litigators working for the financial industry have been scoring some important victories, using the courts to block rules required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Notably, the U.S. Court of Appeals for the D.C. Circuit struck down a Securities and Exchange Commission rule that would have given shareholders more say in the selection of corporate directors, on the grounds that the regulation lacked adequate cost-benefit analysis. A lower court struck down a Commodity Futures Trading Commission rule imposing position limits on traders because of supposedly ambiguous wording.