Interest of Amici Curiae[1]
The Bank Policy Institute (“BPI”) is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks, and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.
The American Association of Bank Directors (“AABD”) is a non-profit organization that represents the interests of bank directors throughout the United States. Founded in 1989, AABD is the only trade group in the United States devoted solely to bank directors and their information, education, and advocacy needs.
This case is important to amici because it implicates structural constitutional questions that define the rights of banks and bankers in regulatory enforcement proceedings. The Supreme Court’s decision in SEC v. Jarkesy, 603 U.S. 109 (2024), established a framework for courts considering Seventh Amendment and Article III challenges to administrative adjudication. After filing an amicus brief in this Court in Burgess v. Whang (No. 22-11172), a case raising similar issues, amici submit this brief to underscore the importance to the banking industry of rehearing en banc in this case. The panel’s decision risks sweeping effects on the industry, undermining access to juries and Article III courts for both national and state-chartered banks, and for their directors and employees.
Introduction and Summary of Argument
The panel’s decision establishes a wholesale exemption from the Seventh Amendment for all bank regulatory enforcement actions. Under the decision, over 4,000 banks in the United States and their two million directors and employees have no right to a jury trial when accused, by any of three federal bank regulators, of a wide range of misconduct actionable at common law.
As the panel itself recognized, exceptions to the Seventh Amendment jury trial right must come with an “unbroken historical pedigree.” Op. 18 (quoting Jarkesy, 603 U.S. at 153 (Gorsuch, J., concurring)). The panel’s analysis, however, omits the first century of bank regulation in the United States—a century during which the federal government had no role in regulating private banks. While interpreting a statute that applies to both state- and federally chartered banks, the panel centered its historical analysis exclusively on the regulation of federally chartered national banks, which were first created during the Civil War. As a consequence, the panel sidestepped controlling precedent and created a new, industry-wide carve-out from the Seventh Amendment with no basis in practice at the Founding.
That error of history has substantial consequences today. The structure and process of banking enforcement creates a playing field so uneven that it cannot be used. Respondent the Office of the Comptroller of the Currency (OCC) has issued 150 civil money penalties against OCC-regulated banks in the past fifteen years; not a single OCC-regulated bank has challenged a penalty before an OCC administrative law judge. The few bank directors and employees who have done so have invariably lost. In practice, denial of a jury trial has too often led to denial of any hearing at all.
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[1] Amici state that no counsel for any of the parties authored this brief in whole or in part, and no entity or person, aside from amici, their members, or their counsel, made any monetary contribution intended to fund the preparation or submission of this brief.
