Regulatory Reform and the Courts: What the Industry Needs to Know

(From left: Alisha Sears, Elizabeth Prelogar, Jeff Wall and Elaine Goldenberg, by Anneliese Mahoney)

WASHINGTON–Three lawyers who formerly occupied various roles in the U.S. solicitor general’s office joined the Mortgage Bankers Association’s Compliance and Risk Management Conference Sept. 28 to share opinions on litigation trends and the courts’ impact on the regulatory environment.

One big change in recent years has been the significance of the emergency docket, the panelists said.

“It’s really remarkable just how much it’s transformed the work of the [solicitor general] office in particular,” said Elizabeth Prelogar, who served as the 48th solicitor general of the United States from 2021-2025. She is now a partner at Cooley.

“There is direct correspondence with how much time the court is spending on emergency docket cases versus how much time it has left over to devote to the bread-and-butter merits docket,” Prelogar said, giving as an example the recent spate of cases concerning presidential power. “And so there’s really kind of a direct one-to-one correlation between just the astonishing amount of activity happening on an emergency basis and the court’s reduction in its caseload, which has spillover effects in all kinds of areas of the law.”

This has “transformed the resources and work of the court,” she said. “It’s a pretty tough problem to solve for because if the court doesn’t have much time to decide, you don’t necessarily want it to be issuing lengthy opinions that are going to have a lock-in effect and prevent the court from thinking about it with the fullness of time and the ability to have more deliberation.”

Another somewhat recent change was the Supreme Court’s decision relating to the Chevron Doctrine. Jeff Wall, former acting solicitor general of the United States in both 2017 and 2020-2021 and current partner at Gibson Dunn, broke it down for the crowd. “Why should mortgage companies care? […] You’re a regulated party. You typically don’t want the thumb on the scale for your regulator,” he said. “So it’s changing the way that these agencies act and it’s changing the way that courts react. And that is, in general, good for regulated parties that disagree with the legal interpretation that a regulator is taking and they want that regulator to have to defend it straight up in court.”

Elaine Goldenberg, formerly an attorney in the office of the solicitor general and partner at Munger, Tolles & Olson, recommended that compliance professionals really think ahead and anticipate changes. “People are bringing in more challenges and courts are more willing to overturn agency interpretations,” she explained. She described, for example, consulting which parts of the business are relying on long-standing agency interpretation that might get shifted by a court and preparing for different contingencies.

The panel also urged understanding of where the court’s priorities might be. Wall noted that this Supreme Court is currently more focused on other issues, such as separation of powers, religious liberty and constitutional questions, rather than more business-focused questions that are particularly salient to those in the industry.

Panel moderator Alisha Sears, director, regulatory counsel with MBA, also posed a question for the panel on how industry professionals should view the interplay between federal and state requirements. “This does seem to be an era where that is happening, where state regulators are sort of driving more enforcement, more oversight, taking more actions and it does require knowing a lot about what’s going on in various states,” observed Goldenberg, calling it a “real challenge” for companies. It also raises questions about preemption, she noted, predicting that could be something SCOTUS weighs more broadly in the near future.

In terms of practical advice in the current environment, Wall urged proactive communication: “I do think when you are dealing with some of these departments, agencies, financial regulators, there are times when it can be really helpful to just to try to sit down, meet, talk about things, and make sure the right people in the government are talking. And it’s not something that people always think about. Sometimes you just take the government’s position as a given, and I would say that you shouldn’t always do that.”