Week in Review

IN THE NEWS

• President Joe Biden announced his approval of a tailored plan to cancel federal student loans for nearly 153,000 borrowers. This round of repayment will affect individuals who have paid loans for 10 years and borrowed $12,000 or less. This policy comes in the wake of the U.S. Supreme Court’s 2023 decision to strike down a broader loan forgiveness program.
• The U.S. Supreme Court declined to hear challenges to New York’s rent stabilization laws, which limit both the amount some landlords can charge and the level of annual rent increases. The landlord petitioners argued that these laws have “dramatically reduced the economic value” of their property, amounting to an unconstitutional taking. Attorneys representing the city told the justices that this case “would needlessly disrupt the residential rental market, and countless lives.” Justice Clarence Thomas, however, left the door open for a potential resolution by the Court, stating that the Court should consider this question in a future case.
• The U.S. Supreme Court heard oral arguments in a case that would decide whether the six-year statute of limitations for challenging a federal rule or regulation begins when the action is finalized or when an individual party is injured, as petitioners argue it should. The U.S. Department of Justice argued in its response brief that adopting the petitioner’s stance would “substantially expand the class of potential challengers and thereby increase the burdens on agencies and courts.” The brief also notes that this approach would require courts to “perform backward-looking inquiries” to determine if a plaintiff is entitled to sue, further wasting judicial resources.
• The Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury proposed a rule that would require those involved in real estate closings and settlements to report certain transfers of real estate to the Treasury Department. Transfers subject to the reporting requirement include those to businesses not regulated by federal authorities, unregistered investment vehicles, and nonprofit corporations. FinCEN expressed that the goal of the proposed rule is to combat money laundering and maintain trust in the residential real estate market.
• The U.S. Department of the Treasury’s Office of Foreign Assets Control finalized amendments to the North Korea Sanctions Regulations. These amendments aim to further restrict financial transactions and trade activities between the U.S. and North Korea, which would include the humanitarian activities of nongovernmental organizations. These changes reflect the Treasury Department’s reaction to “evasion tactics” employed by North Korea to avoid the sanctions.
• The Department of Health and Human Services’s Substance Abuse and Mental Health Services Administration issued a rule revising its regulations governing the confidentiality of substance use disorder patient records. The rule addresses a section of the Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act, to improve its privacy protections to match the level of privacy protection secured by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The revisions enhance privacy protections for people seeking treatment for substance use disorders.
• The U.S. Department of Agriculture proposed a referendum to reevaluate the Agriculture Marketing Service’s Peanut Promotion, Research, and Information Order. The order was designed to increase peanut consumption, promote research, and disseminate vital information to industry stakeholders and consumers. The referendum will evaluate whether the peanut industry supports the order’s continuation. Eligible peanut producers may vote in the referendum.

WHAT WE’RE READING THIS WEEK

• In a forthcoming article in The George Washington Law Review, Carla L. Reyes, an associate law professor at Southern Methodist University Dedman School of Law, argued that existing cryptocurrency regulations have been unsuccessful because they predominantly targeted intermediaries—institutions acting as middlemen in a transaction. Reyes explained that regulating cryptocurrency technology is difficult because these technologies are designed to eliminate intermediaries. She concluded that regulators’ dependence on intermediaries not only hinders the formulation of effective rules but also undermines the legitimacy of regulations and regulatory institutions.
• In a recent Brookings Institution article, David Wessel, senior fellow in Economic Studies at Brookings, analyzed how the U.S. Federal Reserve proposes to move away from quantitative easing altogether. Under quantitative easing, the Federal Reserve bought securities “to reduce interest rates and increase the money supply.” Quantitative easing also includes quantitative tightening, a process that shrinks the Federal Reserve’s balance sheet. Wessel referenced statements by Jerome Powell, Chair of the Federal Reserve, that quantitative tightening will end by 2025. Wessel argued that the Federal Reserve will consider multiple factors to decide when to stop quantitative tightening, including the sufficiency of its reserves, to ensure stability in the financial system.
• In a recent working paper for the Tax Policy Center, a joint initiative between the Urban Institute and Brookings, senior fellow Janet Holtzblatt and several coauthors studied racial disparities in the treatment of marriage by the United States federal income tax system. Married couples filing jointly, and especially those with one wage earner, faced lower effective tax rates on average. Drawing on survey data, the authors found that Black couples are more likely to be dual earning, and so are less likely to benefit from tax advantages for married couples. As a possible reform, the Holtzblatt team explored reintroducing a two-earner deduction, but concluded that this would mostly benefit high-income couples.

EDITOR’S CHOICE

• In an essay in The Regulatory Review, John D. Graham, a professor at Indiana University’s Paul H. O’Neill School of Public and Environmental Affairs, proposed introducing an “equity test”—a new cost-benefit analysis that would account for the interests of low-income Americans—into the federal rulemaking process. Graham argued that this analysis would help federal agencies develop more creative regulatory alternatives that are good for society as a whole as well as the poor. Graham concluded that while his analysis is viable across many regulatory contexts, federal agencies will need to collect additional data to effectively implement equity tests.