Our nation’s highest court listened to arguments on April 28, 2009 in a case that has been running for four years. The case involves a question about whether the state or federal regulators should have jurisdiction over regulating national banks.

Why should we be interested in this outcome?

The arguments should be quite familiar to most of the environmental professionals that read Pollution Engineering magazine. Elliot Spitzer filed complaints claiming that banks were in violation of state antidiscrimination laws by forcing minority groups to pay higher interest rates for mortgages. He ran into problems as the federal regulators were setting rules and the banks argued they were in compliance with those rules and the state rules could not apply.

Here is where it becomes familiar. The banks and federal regulators are arguing that by letting state officials regulate the banks, it would force financial institutions to have to negotiate with a different set of rules in each state and lead to confusion. Apparently, that argument held some water as Justice Stephen Breyer said he tried to picture 51 regulators poring over a bank’s books looking for a statistical pattern. He was quoted as saying, “As long as, most unfortunately, income is correlated with race, with minorities being toward the bottom, of course such statistical disparities will exist, some legitimate, some not. In such analysis, reasonable people will often differ.”

This eerily reminds me of the argument about letting the states set emission policy for mobile emissions and fuel standards. The resulting patchwork of rules not only makes it harder to do business but ultimately raises prices to the consumer, be they industrial or residential.

I think the famous quote from Rodney King says it all, “Can we get along?”