Overnight Regulation: Labor board burns through Obama-era rules | European court deals blow to Uber | DeVos issues new rules to help defrauded students

Welcome to Overnight Regulation, your daily rundown of news from the federal agencies, Capitol Hill, the courts and beyond. It’s Wednesday night in Washington, where Republicans passed a massive tax overhaul, and lawmakers have two days to fund the government and avoid a shutdown.

 

THE BIG STORY

The National Labor Relations Board (NLRB) is delivering a flurry of wins to businesses now that it has a Republican majority under President Trump.

The independent board tasked with enforcing fair labor practices and collective bargaining rights overruled three Obama-era rules last week in a series of 3-2 rulings.

Employers had fought for years against the rules, including a controversial NLRB decision that changed the definition of a joint-employer.

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The joint-employer rule put companies potentially on the hook for labor law violations committed by their subcontractors if they have indirect or potential control over the terms and condition of employment. Companies that operate on a franchise model vigorously opposed the change.

On Thursday, the labor board said it’s returning to the standard that requires companies have “direct” and “immediate control” over labor conditions before they are liable for violations.

The board also created a stricter test for determining when policies in employee handbooks will violate the rights of workers to bargain collectively. It also voted to prevent employees from being able to form so-called micro-unions.

But worker rights advocates say the board is making the rulings in an unprecedented way.

Lydia Wheeler has more here.

 

REGULATORY ROUNDUP

Transportation: The European Court of Justice dealt Uber a major blow on Wednesday, declaring that the transportation company should be regulated like a taxi service instead of a technology company.

The top European Union (EU) court said Uber and other similar technology companies are “inherently linked to a transport service” and should be “a service in the field of transport,” according to The Associated Press.

The decision could affect the way governments inside and outside of Europe regulate internet services like Uber that struggle to fit in with long-established laws.

Julia Manchester has more here.

 

Education: The Department of Education on Wednesday announced new rules for providing aid to students claiming they were defrauded by their colleges that limits some student loan refunds according to income.

Education Secretary Betsy DeVos said the new system “protects taxpayers from being forced to shoulder massive costs that may be unjustified.”

Under the new process, students’ loan forgiveness will be determined by their income. Those making less than half of what their peers earn will receive full relief, the department said.

“No fraud is acceptable, and students deserve relief if the school they attended acted dishonestly. This improved process will allow claims to be adjudicated quickly and harmed students to be treated fairly,” DeVos said in a statement. 

The new policy is a departure from Obama-era rules, which provided full loan forgiveness to defrauded students.

Brett Samuels has more here.

 

Finance: The chief U.S. bank overseer on Wednesday called on the financial services industry to provide better ways to serve customers online or risk losing business.

Comptroller of the Currency Joseph Otting said that banks have to offer customers easier access to lending and other critical services through mobile applications and websites to prevent losing ground to financial technology companies.

“The old ways of doing a lot of things are evolving, and I think that the financial services industry has to evolve as well,” said Otting, who was confirmed Nov. 16, in his first briefing with reporters.

Financial technology companies, often called “fintechs,” have exploded in popularity as smartphones proliferated throughout the U.S. Such companies offer loans, money transfers and payments using mobile apps or websites.

Read more from Sylvan Lane here.

 

Environment: A federal court wants the Environmental Protection Agency (EPA) to report, with “precision and specificity,” how it plans to take a key step in implementing a 2015 smog pollution rule.

The demand from the Court of Appeals for the District of Columbia Circuit came after the EPA in November shared which areas of the country comply with the regulation, but refused to say which areas do not comply.

Both kinds of designations were due Oct. 1, two years after the Obama administration finalized its major ground-level ozone rule. Environmentalists and Democratic states have sued the EPA to force the declarations known as “nonattainment” designations.

EPA Administrator Scott Pruitt opposed the regulation in his previous job as Oklahoma’s Republican attorney general and sued to stop it.

Timothy Cama has the rest of the story here.

 

Health care: The Department of Justice (DOJ) has dropped its appeal of a district court order that stopped it from blocking two young, unaccompanied immigrant women in federal custody from obtaining an abortion.

DOJ was appealing the court order for only one of the two women, known as Jane Roe, but asked the court to dismiss the case late Tuesday after it was discovered that Roe was 19 years old, not 17 years old, as previously believed.

The department said Roe was transferred from the Office of Refugee Resettlement to U.S. Immigration and Customs Enforcement (ICE) and released on her own recognizance.

An ICE spokesperson confirmed for The Hill that, under the national detention standards, a woman in custody can obtain an abortion. The woman must bear the cost of the procedure unless her life is endangered by carrying the baby to term, or if the pregnancy is the result of rape or incest.

Read more from Lydia Wheeler here.

 

Technology: Tom Wheeler, the former chairman of the Federal Communications Commission (FCC) under President Obama, on Wednesday called for internet giants like Facebook and Google to be regulated.

“It is time to recognize that the most powerful companies in the country should not be making their own rules,” Wheeler wrote in a blog post for the Biden Forum.

“These are not evil companies or malicious executives,” he continued. “In the absence of ground rules, however, human nature and economic incentive take over. Aided and abetted by their powerful technological capabilities, the companies that control the internet are free to impose their will without permission or oversight.”

Harper Neidig has more here.

 

Courts: Nearly a third of President Trump‘s judicial nominees have records that demonstrate hostility towards the rights of LGBT people, according to a new analysis released Wednesday by Lambda Legal.

The LGBT advocacy group said one-in-three, or 16 of the 59 nominees that Trump has put forth since taking office, have anti-LGBT records, including Leonard Steven Grasz who was recently confirmed to 8th Circuit Court of Appeals.

Grasz was rated “not qualified” by the American Bar Association out of concern that he would be unable to be an impartial judge.

Lambda Legal also pointed to Matthew Kacsmaryk, who has been tapped to serve as a district judge on the U.S. District Court for the Northern District of Texas.

Lydia Wheeler has the rest of the story here.

 

Finance: The top United States bank overseer told reporters Wednesday that he supports moderate changes to the strict post-crisis rules placed on banks.

Comptroller of the Currency Joseph Otting said during a roundtable with reporters that the Dodd-Frank Act of 2010 helped make banks more aware of their risk, but needed to be revised to loosen the burden on smaller firms.

“The banking industry is in the best shape it’s ever been,” said Otting, a former bank CEO who was confirmed by the Senate on Nov. 16.

“There were a lot of risks that a lot of institutions didn’t know they had, or weren’t cognizant of” before the crisis, Otting said, referring to the large national and international footprints.

Read the rest Sylvan Lane’s story here.

 

Technology: New York State Assemblymember Patricia Fahy (D) is pushing a bill in an effort to protect the principles of net neutrality in her state in the wake of the Federal Communications Commission’s (FCC) vote to repeal the popular Obama-era regulations.

According to Fast Company, Fahy has introduced a short piece of legislation that would prohibit state, county and city authorities from doing business with internet service providers that engage in business practices that were prohibited by the net neutrality rules, like blocking or throttling web content or making websites buy into internet “fast lanes.”

“If you are going to be a contractor and want to work with New York, then you must meet the principles,” Fahy told the magazine.

Harper Neidig has more here.

 

Technology: The trading platform Coinbase is investigating potential insider trading involving the digital currency Bitcoin Cash.

The company is looking into whether an employee profited off inside information Tuesday when the platform saw a dramatic rise in the value of Bitcoin Cash.

Coinbase, the largest cryptocurrency trading platform, had just allowed live trading on Bitcoin Cash for the first time earlier that evening. The platform suspended trading of Bitcoin Cash after its value soared from $3,000 a coin to more than $8,500 a coin within an hour.

In a blog post, the GDAX trading platform — owned by Coinbase — said it was suspending Bitcoin Cash trading because of “significant volatility” until Wednesday morning.

Ali Breland has more here.

 

Elsewhere in the news:

France to ban oil and gas production by 2040 (The Hill)

US sanctions Chechen president under Magnitsky Act (The Hill)

House passes bill to revamp criteria for ‘systemically important’ banks (The Wall Street Journal)

FDA blesses blindness treatment that could cost $1 million (The Wall Street Journal)

Uber’s dismal 2017 ends in regulatory armageddon (Vanity Fair)

Europe’s financial regulation chief concerned about cryptocurrency volatility (Financial Times)

US regulator downplays bitcoin fears (Reuters)

Not just Mylan: misclassifications may have cost Medicaid more than $1B (Regulatory Focus)