graham steele
@grahamsteele.bsky.social
3.6K followers 1.1K following 1K posts
Assistant Professor, UNC School of Law. Teaching and writing about financial and corporate law. Former Assistant Secretary, US Treasury Department & Democratic chief counsel, Senate Banking Committee. law.unc.edu/people/graham-steele
![On its face, this was a factual comparison between two regulatory regimes. [Board Staff 1] nevertheless regarded the framing as consequential. Because EGRRCPA and the ensuing tailoring rules had deliberately reduced the requirements applicable to certain firms, asking what would have applied in their absence would necessarily produce a list of additional requirements to which SVB might otherwise have been subject.](https://cdn.bsky.app/img/feed_thumbnail/plain/did:plc:vujck3ucc4eiy2ittdtezn6p/bafkreibmasareqgz2v32lfrf7dtitvzgw65jbkcyuh7iavontmcsedzrmu)
![As [Board Staff 14] observed, before the failure “very many people” would not have expected a $200 billion bank to warrant invocation of the Systemic Risk Exception. Yet SVB did, “because of the context
and the similarity with other business models, the speed of the run, et cetera.” For [Board Staff 14], that experience suggested that “maybe we need to reconsider the slope”: institutions previously regarded as non-systemic proved capable of generating systemic consequences.](https://cdn.bsky.app/img/feed_thumbnail/plain/did:plc:vujck3ucc4eiy2ittdtezn6p/bafkreibfrjjfvufltukl2tcu4v6di5ceyvq5ys5it3zn4rgwomr23kwpra)
![[Board Staff 14] described that fourth conclusion as “poorly understood.” The Barr Report, he explained, “did not say there was a bad law” [EGRRCPA]. Its criticism concerned implementation: “the way it was implemented” created “step functions in how supervision was done” and resulting confusion “as firms move between portfolios.”](https://cdn.bsky.app/img/feed_thumbnail/plain/did:plc:vujck3ucc4eiy2ittdtezn6p/bafkreiaww54zgv5uay2t77jlpnd5y5oxjy3tavqlsrodwdllscnieroy6a)
![Under our precedents, this is a major questions case. In arguing that Section 111(d) empowers it to substantially restructure the American energy market, EPA “claim[ed] to discover in a long-extant statute an unheralded power” representing a “transformative expansion in [its] regulatory authority.” Utility Air, 573 U. S., at 324. It located that newfound power in the vague language of an “ancillary provision[]” of the Act, Whitman, 531 U. S., at 468, one that was designed to function as a gap filler and had rarely been used in the preceding decades. And the Agency’s discovery allowed it to adopt a regulatory program that Congress had conspicuously and repeatedly declined to enact itself.
Brown & Williamson, 529 U. S., at 159–160; Gonzales, 546 U. S., at 267–268; Alabama Assn., 594 U. S., at ___, ___ (slip op., at 2, 8). Given these circumstances, there is every reason to “hesitate before concluding that Congress” meant to confer on EPA the authority it claims under Section 111(d). Brown & Williamson, 529 U. S., at 159–160.](https://cdn.bsky.app/img/feed_thumbnail/plain/did:plc:vujck3ucc4eiy2ittdtezn6p/bafkreigsmsn3rkvtczswm6cxwuhrbo67nx35k3aboeiiutdmyp7wjbp73y)
![Excerpt of Alito's dissent in the mail-in ballots case: "regulate the mail. It holds the “general powers” to “adopt, amend, and repeal such rules and regulations, not inconsistent with this title, as may be necessary in the execution of its functions under this title and such other functions as may be assigned to [it] under any provisions of law outside of this title.” 39 U. S. C. §401(2). Through this provision,Congress has “broadly empowered [the Postal Service] to adopt rules and regulations.” Postal Service v. Council of Greenburgh Civic Assns., 453 U. S. 114, 123 (1981). ThePostal Service also possesses the power “to provide for the collection, handling, transportation, delivery, forwarding, returning, and holding of mail, and for the disposition of undeliverable mail.” 39 U. S. C. §404(a)(1)."](https://cdn.bsky.app/img/feed_thumbnail/plain/did:plc:vujck3ucc4eiy2ittdtezn6p/bafkreifyuce2z4ewx5wdn4h5gcn6yntogiunyg56epnl53bvq3vzz2wala)
![In contrast to the heightened sensitivities of these non-aligned Fed Governors and Reserve Bank Presidents, Trump appointee Michelle Bowman is facing no apparent White House pressure for having violated the Fed’s communications blackout policy to attend an invite-only event with Wall Street investors. This is the political environment the Fed is currently operating in: those who are disfavored by the White House live under the threat of pretextual removal controversies, while the White House’s allies face little-to-no removal pressure, even when they engage in actions that give rise to a clear appearance of impropriety.
The Court’s new facts-and-circumstances test for for-cause removal seeks to deter pretextual removals, thereby preventing the President from “turn[ing] for-cause protection into little more than at-will employment.” Yet, these recent experiences illustrate how Cook is unlikely—and cannot reasonably be expected—to remove the Sword of Damocles hanging over the Fed. Indeed, there are media reports that the White House is already contemplating ways to take another run at removing Fed Governors—both Governor Cook and potentially also Governor Jerome Powell—in a manner that would comply with the letter, if not the spirit, of Cook.](https://cdn.bsky.app/img/feed_thumbnail/plain/did:plc:vujck3ucc4eiy2ittdtezn6p/bafkreih6zd6eet3bylyxjozclmjmlgthcmgpozigzsanfu5o4khuvoh4sm)
![These developments foreshadow a post-Slaughter future where Presidents—or at least Presidents of a certain party—can use the appointment power to control both single-director and multi-member agencies, thereby undermining the sort of reasoned policymaking that Congress and the courts have said is both constitutional and desirable. Due to the Senate’s undemocratic features, the most likely scenario is that Presidents of the Democratic Party will be stymied by a Republican-controlled Senate if they try to rebuild the capacity of these agencies. It is unclear whether and to what extent agencies will operate with bipartisan, multi-member leadership—or even any functional leadership at all.
Again, the Court in Seila Law v. CFPB said the removal power is essential to ensuring a President is not “saddled with a holdover [agency official] from a competing political party who is dead set against [their] agenda.” Yet, the same conservative Justices who wrote those words could make the situation worse, not better, by overruling Humphrey’s Executor.](https://cdn.bsky.app/img/feed_thumbnail/plain/did:plc:vujck3ucc4eiy2ittdtezn6p/bafkreic6by6i333hdnxsvo7ar265xicipjvm5rwrzezevbb7shycsyu3jy)
![Court does not dispute that members of the Federal Re-
serve Board exercise (a great deal of ) federal executive
power. It does not dispute that any person who exercises
federal executive power must be freely removable by the
President. And it does not dispute that its holding today
contravenes those principles by preventing the President
from freely removing members of the Federal Reserve
Board. Instead, the Court endorses a contradiction: “the
Constitution vests the whole executive power in the Presi-
dent alone,” Slaughter, 609 U. S., at ___ (slip op., at 21) (in-
ternal quotation marks omitted), but the Board can exercise
executive power “independen[t] from Presidential control,”
ante, at 22.
The Court’s constitutional reasoning depends entirely on
an ahistorical analogy between the Board and the First and
Second Banks of the United States. See ante, at 22–23. The
problem for the Court is that the First and Second Banks
were banks with no executive power, whereas the Board is
unquestionably a federal agency that wields considerable
executive power. See supra, at 3–9. The Board does not
follow in “our Nation’s tradition of central banking” at all.
Ante, at 9; see supra, at 3–6. It is not a “bank,” ante, at 23,
but a novel “federal agency” with “broad powers affecting
the entire banking and currency system,” Cushman 153;
see supra, at 4–5. The “‘founders of our Government,’”
ante, at 22, thought that distinction was significant. Alt-
hough the Court attempts to imply otherwise, ibid., it does
not deny that the First and Second Banks of the United
States exercised no executive power.](https://cdn.bsky.app/img/feed_thumbnail/plain/did:plc:vujck3ucc4eiy2ittdtezn6p/bafkreihl6ukv3xyme7mu7c2xuecgo2ge5hqmesf5qu5obgjkr7ycrru5yq)
