108 Iowa L. Rev. 1303 (2023)
Abstract
Banks are subject to heavy regulation that is secret, not justified by cost-benefit analysis, not reviewed by the courts, not constrained by congressional appropriations, and not responsive to the President. They nonetheless prosper under the regime. The fact that they do challenges some of the basic assumptions of American administrative law—that transparency and process creates better regulation through sunlight and reasoned decision-making, that judicial review checks regulatory abuses where sunlight and reasoned decision-making do not, and that a utilitarian assessment of the merits of regulation is essential. Instead, the banking regulators offer a different approach to administration—one that is collaborative and corporatist rather than adversarial and legalized. This Article shows how this model works, how it differs from the model of administrative law most often taught in law schools, and where else it can be found in government—in areas ranging from power supply to national defense to vaccine production. Collaborative administrative governance can work, but the banking variant of it would benefit by becoming a more transparent regulatory regime, where the precise nature of the collaboration, and the moments of adversarial separation between banks and government, are more obvious to all who wish to look. It means, among other things, that banks and nonbank interest groups should sue the government more, that the government should make public more of its dealings with banks, and that the international aspects of banking regulation should continue their journey toward greater transparency.