S.Ct. Religion Docket - 2/24/98

[Vance R. Koven]

At 3:07 PM -0800 2/26/98, Mark S. Scarberry wrote:
>Here is S.1244, which "[t]he Senate Judiciary Committee today approved by
>unanimous consent on a
>voice vote," according to the American Bankruptcy Institute.   The ABI expects
>it to pass both the House and Senate easily.  Note especially the reference to
>RFRA at the end of the bill.  If this bill passes, it will include a message
>from Congress that RFRA still applies to the federal government.

This treatment seems consistent with Congress's recent approach to
religiously-motivated exemptions from generally applicable regulatory
schemes.

I've just finished reading an article on how the Philanthropy Protection
Act of 1995 and the National Securities Markets Improvement Act of 1996
have bolstered the existing non-profit fundraising exemptions from the
securities laws (the article is Timothy Horner and Hugh Makens, "Securities
Regulation of Fundraising Activities of Religious and Other Nonprofit
Organizations," 27 Stetson L. Rev. 473). Interestingly from my standpoint,
Congress took a sweeping approach in this area it had not been willing to
take in many other areas of securities reform, which is to pre-empt state
regulation of numerous activities of NFP (principally religious)
fundraising. The Blue Sky laws have been pretty much sacrosanct throughout
most of the "capital formation" reformist activities of the 1980s and early
90s.

An interesting observation the authors of the article make is that the SEC
had, before issuing several no-action letters and then favoring the PPA,
taken the view that they had to be especially vigilant in connection with
securities issued for religious fundraising purposes because the inherent
gullibility of religious believers made them easy prey for scam artists, or
at least less gimlet-eyed when reviewing the financial stability of the
investment vehicle. I wonder what changed their mind?




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