Playing Nicely: How Judges Can Improve Dodd-Frank and Foster Interagency Collaboration

56 Pages Posted: 17 Apr 2019

See all articles by Joshua Macey

Joshua Macey

University of Chicago Law School

Date Written: 2017


Devised in the aftermath of the most severe financial crisis since the Great Depression, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) was enacted to reduce risk, increase transparency, and promote market integrity. Since Dodd-Frank was signed into law in 2010, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have promulgated numerous rules to carry out these statutory mandates. This Note analyzes inconsistencies in the two Commissions’ swaps regulations and argues that those inconsistencies have forced regulators and market participants to bear substantial costs and, more importantly, have thwarted the congressional goals underlying Dodd-Frank. To this day, neither the SEC nor the CFTC has offered an adequate justification for its decision not to harmonize swaps rules.

In this Note, I argue that the Commissions’ failure to account for these costs constitutes an illegal exercise of authority. The crux of my argument is that the Commissions cannot perform meaningful cost-benefit analysis or fulfill the Administrative Procedure Act’s (APA) reasongiving requirements without considering the incremental costs generated by regulatory inconsistencies. I conclude that
when the SEC and CFTC fail to justify the costs of regulatory divergences, both the APA and the cost-benefit requirements in the agencies’ authorizing statutes can — and should — be read to require the Commissions to adjust their rules to account for the costs of inconsistent and duplicative swaps regulations.

Suggested Citation

Macey, Joshua, Playing Nicely: How Judges Can Improve Dodd-Frank and Foster Interagency Collaboration (2017). Yale Law Journal, Vol. 126, 2017, Available at SSRN:

Joshua Macey (Contact Author)

University of Chicago Law School ( email )

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