Week in Review

IN THE NEWS

• President Donald Trump issued an executive order to repeal an Obama-era executive order that heightened standards for government-backed infrastructure projects in floodplains. The Obama-era executive order aimed “to improve the Nation’s preparedness and resilience against flooding.” President Trump repealed the Obama-era order in an attempt “to ensure that the Federal environmental review and permitting process for infrastructure process is coordinated, predictable, and transparent.”
• The U.S. Court of Appeals for the District of Columbia Circuit rejected the Sierra Club’s contention that the U.S. Department of Energy (DOE) did not comply with its duties under the National Environmental Policy Act (NEPA) and the Natural Gas Act when DOE approved an application for exporting liquefied natural gas from the “Freeport Terminal, a liquefied petroleum gas exporting terminal in Texas.” Among the court’s conclusions was that DOE did not breach “its obligations under NEPA by declining to make specific projections about environmental impacts stemming from specific levels of export-induced gas production.” The court also held that the application was “not inconsistent with the public interest” under the Natural Gas Act.
• The United States Court of Appeals for the Fifth Circuit overturned federal findings of violations imposed on ExxonMobil for a 2013 pipeline spill that adversely affected a neighborhood in Arkansas. The U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) accused ExxonMobil of “failing to maintain the decades-old Pegasus Pipeline and to prioritize testing of a segment of older, high-risk pipe” which was the site of the eventual spill. The court concluded that “despite adherence to safety guidelines and regulations, oil spills do occur” and that PHMSA’s determination that ExxonMobil failed to consider risks was “arbitrary and capricious.”
• Twenty-two Democrats from the U.S. House of Representatives reportedly sent a letter to Sonny Perdue, Secretary of the U.S. Department of Agriculture (USDA), arguing in favor of a rule that would “put in place tough standards on labeling foods with genetically modified organisms (GMOs).” These standards implement a 2016 GMO labeling law, which requires the Secretary of Agriculture to “establish a national mandatory bioengineered food disclosure standard with respect to any bioengineered food” within two years of the law’s passing. Among those who signed this week’s letter was Representative Earl Blumenauer (D-Ore.), who asserted that “USDA must step up and issue a final rule that will ensure all consumers can easily find information about what they are buying and eating.”
• A group of environmental organizations challenged the U.S. Environmental Protection Agency’s (EPA) chemical safety evaluation regulations, claiming that EPA fails to consider all possible uses of chemicals in violation of the Toxic Substances Control Act. A spokesperson for one of these groups, Earthjustice, said that EPA’s regulations “will leave children, communities, and workers vulnerable to dangerous chemicals.” EPA, however, claimed to have issued the regulations “to ensure confidence in the risk evaluation process.”
• The Federal Communications Commission (FCC) pushed “the deadline for reply comments in response to” its proposed net neutrality rule to August 30, 2017. Numerous groups, including Public Knowledge, asked for the postponement to “prepare thorough and well-informed replies.” Although telecom companies urged the FCC to reject the proposed delay, the FCC concluded “that an extension of the reply comment deadline is appropriate in this case in order to allow interested parties to respond to the record in this proceeding.” The FCC has reportedly received more than 20 million comments from the public on the proposed net neutrality rule, which is “a record for FCC comments.”
• The FCC proposed to amend its rules that currently “prohibit carriers from misrepresenting themselves when placing telemarketing sales calls to consumers and placing unauthorized charges on their phone bills.” The FCC intends to issue changes that aim to “prevent unscrupulous carriers from targeting vulnerable populations from committing fraud either on sales calls or when ‘verifying’ a consumer switch.”
• The Massachusetts Executive Office of Energy and Environmental Affairs issued “specific, annually declining limits on greenhouse gas emissions” in compliance with the Massachusetts Global Warming Solutions Act, as interpreted by the Supreme Judicial Court of Massachusetts. The regulations create a cap-and-trade program and lower the allowed emissions by utilities and state-owned vehicles.
• A group of Illinois legislators introduced legislation prohibiting a home rule county from “imposing a tax on sweetened beverages.” In November 2016, the Cook County Board of Commissioners in Illinois passed an ordinance requiring any distributor or retailor to impose a tax on the sale price of a sweetened beverage. The introduced legislation, which would repeal this ordinance, followed a letter from the U.S. Department of Agriculture informing the Illinois Department of Human Services that the sugary beverage tax violates the Food and Nutrition Act.

WHAT WE’RE READING THIS WEEK

• In a forthcoming paper for the Journal of Corporation Law, Gwendolyn Gordon and David Zaring, both of The Wharton School at the University of Pennsylvania discussed the idea of regulating the banking industry through ethics codes, which, in part, require “client interests to be put ahead of the banker’s interests.” The pair argued that “ethical banking, while being no substitute for demanding rule-based regulation, may be a complement to it.”
• In a report, the Consumer Financial Protection Bureau’s (CFPB) Office of Research examined “the behavior of student loan borrowers” using data from the CFPB’s Consumer Credit Panel. One of the CFPB’s findings was “a strong relationship between repayment speed and loan amount;” the CFPB noted that student loan borrowers with over $20,000 in loans “now make up more than 40 percent of all borrowers entering repayment,” and these borrowers tend to repay at a slower rate than those with smaller loans.
• In a forthcoming paper in the Yale Journal on Regulation, Sureyya Burcu Avci, Cindy Schipani, and Nejat Seyhun, Professors at the University of Michigan’s Ross School of Business investigated the importance of the Volcker Rule, which restricted United States banks from making speculative investments that do not benefit their customers. Avci, Schipani, and Seyhun found that banks access and use private information about their clients and trade on this information, which increases the amount earned on proprietary trades. If the Volcker Rule is enforced, the authors demonstrated that incentives to banks trading on “material, non-public information about their clients” would be eliminated and “current conflicts of interest in the banking system resulting from the elimination of Glass-Steagall restrictions” would be contained.