With the ongoing stay in the Securities and Exchange Commission’s (SEC) climate disclosure rule, eyes are on the courts for how they will rule to rein in the SEC from going outside of their agency’s authority.
Recent news of the Supreme Court’s decision on the Consumer Financial Protection Bureau (CFPB), rejecting a challenge to its unique funding structure, has raised concerns that this will pose good news for federal regulators like those at the SEC who will be granted permission to regulate outside of the bounds of proper congressional oversight. Yet while legal minds may think this decision will aid in the SEC overreaching its authority without consequence, the courts should not confuse the two and focus on the uniqueness of each agency, as cited in the recent case.
The Supreme Court recently ruled that the CFPB’s unique funding structure, where it derives funds directly from the Federal Reserve system instead of Congressional appropriations, does not violate the Appropriations Clause. The SEC is almost certain to face legal challenges with its final climate disclosure rule – the reason for the ongoing stay – but the implications of the Supreme Court decision cannot be overlooked. The SEC is an entirely different entity, although operating in the same overreaching ways, and should be treated as such.
The Court’s decision stressed the uniqueness of the CFPB case, where the only question was the funding structure. What is unique about the SEC is their flagrant attempt to regulate emissions disclosures, even when SEC Chair Gary Gensler has repeatedly stated that “[The SEC] is not a climate regulator.”
Thus, the legal factions must consider the uniqueness of each situation, and not compare apples to oranges between the CFPB and SEC. With any proper judicial review of the SEC’s illegal climate regulation, courts should find that it is taking a unique, unprecedented step that needs to be stopped.