Administrative law: control of agencies - Term Paper Example

Administrative Law: Control of Agencies The administrative law of the United s is a body of laws that have been put in place to govern the activities of government agencies when conducting their activities. These laws are often based on the American constitution and because of this, the government has every right to enforce them as it sees fit. The American Constitution can be deemed to be among the most imperative legal manuscripts in the record of the contemporary world. It has guided the United States since it gained independence from Britain from being a loose federation of former colonies, to becoming the most powerful countries in the world. Despite the fact that this document has had an enormous impact in the workings of the government of the United States, some agencies within it have come to use it as a means through which they can expand their power in areas where they are traditionally not supposed to get involved. Furthermore, government agencies have tended to take advantage of conflicting federal and state laws to ensure that they have control over crucial parts of the economy for the sake of protecting the interests of certain business interests as opposed to others. Among the biggest beneficiaries of the conflict in the administrative laws at both the federal and state levels have been the regulatory agencies, which have come to achieve immense powers over the sectors over which they were created to regulate. In the case State of Michigan vs the Federal Government (2006) presented by the state of Michigan to the Supreme Court against the federal government, the former placed a suit against the actions of the Office of the Comptroller of Currency over some of the regulations that it had issued. Among the regulations that were opposed in the suit was that of the OCC exempting state chartered corporations from obeying state laws in instances where they were operating subsidiaries of banks that were chartered nationally. The state of Michigan argued that these new regulations by the OCC prevented the state government from enforcing its lending registration laws against Wachovia Mortgage, a state-chartered mortgage lender owned by a national bank. This state urged the Supreme Court to make invalid the OCC's regulation because it completely overstepped the authority given to this agency by Congress. Over the past few decades, plenty of tension has developed between state and federal laws and this has mainly been because of the fact that regulatory agencies, such as the Office of the Comptroller of Currency (OCC), have been given too much power in the regulation of the American financial system (Langer et al 617). The immense power that they have has led to instances where such agencies, instead of upholding their duties to protect the citizens from being abused by institutions like banks, have come to do the opposite of what they were meant to do. There have developed instances where the regulatory agencies have sided with leading private institutions on issuesfromwhich they weresupposed to protect the public.Among the issues that have come to see massive interference from regulatory agencies are those concerning the attempts of states to enact laws whose main purpose has been to protect those who live within these states. The laws, which have been enacted, have tended to be overridden by the financial regulatory agencies in the name of implementing federal laws. Since the American constitution states that all the laws that are passed at the federal level are supreme to those passed at the state level, many of the agencies have used these laws as an excuse to frustrate any laws that have been passed at the state level for the benefit of the citizens living within these states. Instead, these agencies have developed a culture of helping banks (especially those that operate at a national level) to establish their supremacy over their rivals at the state level. The Office of the Comptroller of Currency, for example, has done everything in its power to eliminate any attempt by the state legislatures to regulate the activities of national banks within the states. It has used ambiguous laws passed by Congress as justification for its interference in the regulatory activities of the state legislatures. This has strengthened the arm of the majority of national banks, giving them the confidence with which to expand their activities in order to make a maximum profit at the expense of their customers (De SenerpontDomis 3). A situation has been created where the national banks have been provided with a tool, which they can use, to preempt any attempt by the state legislatures to regulate them. It has come to be noted that a majority of the national banks have become a law unto themselves, as the agencies that are supposed to regulate them have come to take their side on issues that are crucial in safeguarding their interests. The power of the states to regulate the activities of banks, which operate within their jurisdiction has been curtailed mainly due to the conflict between the implementation of state and federal laws in matters concerning the financial system. There has developed a tendency over the years by the federal financial regulatory agencies to overrule the regulatory laws passed by the states in favor of those passed by Congress. These agencies have failed to consider the fact that most of the federal laws passed tend to be ambiguous, and require state laws to supplement them for more efficient implementation. In addition, there are instances where these regulatory agencies do not consider the intent of the Constitution that affirms that all the laws that are passed by Congress or those that do not consider issues that deal with matters at the state level are under the jurisdiction of state legislatures. The regulatory agencies have given themselves broad powers when dealing with the different areas that they are supposed to regulate, providing more privileges to the business interests that operate at a national level instead of regulating them ("Obama's Finance Reform: Keep Eye on Congress"). In many instances, within the financial system for example, the regulatory agencies, such as the OCC, can be considered acting in favor of banks and utterly against the interests of the people who they are supposed to protect from the bad practices of banks. The activities of regulatory agencies have to be viewed with suspicion because they have ceased to do the tasks for which they were created in the first place. They have instead come to serve the interests of those whom they are supposed to regulate. Because the Supreme Court has come to favor the actions of regulatory agencies believing that all their activities are right, these agencies have practically become a law unto themselves. Their power has developed to such an extent that their decisions, however, faulty have come to override those made by state institutions. In the case Consumer Watchdog vs Federal Trade Commission (2012), Consumer Watchdog filed a motion in the United States District Court asking that it be allowed to oppose the $22.5 million settlement the FTC has reached with Google because the this agreement allowed this company to deny any wrongdoing in violating an earlier consent agreement. Consumer Watchdog asked the judge to grant it friend-of-the-court status and to allow it to submit briefs opposing the settlement; furthermore, it asked for a hearing concerning the proposed deal between the FTC and Google and that it be allowed to be present during the hearing of the case. The other example of how regulatory agencies have come to flout the laws that they are supposed to enforce was the endorsement by the Federal Trade Commission (FTC) of the acquisition of Admobby Google. This decision was highly criticized because it failed to consider the fact that the fast growth of Google was coupled with its need to buy out any potential competition before it came to rival it. The FTC failed to consider that, for a young company such as Google, it has grown to such an extent that it is able to absorb most of its potential rivals in the in the industry as well as those companies which are influential on the internet. This would ensure that Google had an unfair edge on the market over its competitors, hence being a monopoly. The emergence of Google to a dominant position in the market has made some people uncomfortable because of the potential lack of competition. However, the FTC defended its decision to endorse Google’s acquisition stating that the entry into the market by Apple would create the necessary competition needed to counter Google’s dominance (Catan and Vascellaro). While this argument may be held to be valid by some, it does not consider that Google’s dominance of the market may put Apple at a disadvantage because the former has more experience and a larger share than its rival does. The acquisition of Admob by Google raised many eyebrows among those who believe that this move was a violation of antitrust legislation. This is because the fast development of the company, in addition to its dominance of the online market. While a majority of internet users uses Google products in most of their activities online, there are those who believe that its dominance is a threat to competition in the online market. The failure of the FTC to stop this acquisition is clear evidence that its administrative power has been compromised for the sake of protecting business interests instead of the public. It can be concluded that the regulatory agencies have ceased to enforce the administrative laws that have been assigned to then, and have instead, become a tool for the erosion of state authority in favor of the federal and business interests. States are increasingly finding it difficult to pass and implement laws whose main purpose is to protect those under their jurisdiction. Instead, the laws they pass come to be dominated or overridden by the federal ones based on the activities of regulatory agencies. In matters concerning the financial sector, the federal regulatory agencies have ensured that large banks are no longer regulated, and the current economic recession can be blamed on them. Moreover, when it comes to the implementation of antitrust legislation, it has been found that many regulatory agencies either have overstepped their mandate or have come to side with those institutions that they are supposed to regulate. It has therefore become essential that some of the regulatory agencies that have gone rogue have to be controlled before they do more harm than they have already. Works Cited Catan, Thomas, and Vascellaro, Jessica E. "Corporate News: Google Gets Clearance for AdMob Deal - Federal Regulators Say Purchase Won't Harm Competition as Apple also Sets its Sights on Mobile-Advertising Market." Wall Street Journal: B.5. May 22 2010. De SenerpontDomis, Olaf. "OCC Chief of Staff is Calm Amid the Storm." American Banker: 3. Aug 22 1997. Langer, Jeffrey et al. "Introduction to the 2005 Annual Survey of Consumer Financial Services Law: The Tension between Federal Preemption and State Law Applicability Intensifies." The Business Lawyer 60.2 (2005): 611-7. "Obama's Finance Reform: Keep Eye on Congress." The Santa Fe New MexicanJun 18 2009. Read More