Supreme Court guidelines Consumer Financial Protection Bureau funding construction is authorized

May 16, 2024 | blog

The Consumer Financial Protection Bureau headquarters in Washington, D.C., on May 14, 2021.
Andrew Kelly | Reuters

The Supreme Court dominated Thursday that the funding construction of the Consumer Financial Protection Bureau is authorized.

The court docket in a 7-2 resolution rejected an argument that the CFPB’s funding methodology violated the U.S. Constitution’s Appropriations Clause as a result of Congress had not yearly licensed cash for the company. Instead, Congress licensed the CFPB to attract funding from the Federal Reserve system that the company’s director deems vital for its work.

The ruling protects that CFPB from a possible demise sentence, given the danger {that a} bitterly divided Congress wouldn’t authorize annual appropriations for the company within the method that’s conventional for different companies.

“The statute that authorizes the Bureau to draw money from the combined earnings of the Federal Reserve System to carry out its duties satisfies the Appropriations Clause,” Justice Clarence Thomas, a conservative, wrote for almost all.

“Although there may be other constitutional checks on Congress’ authority to create and fund an administrative agency, specifying the source and purpose is all the control the Appropriations Clause requires,” Thomas wrote.

Three different conservatives, Chief Justice John Roberts and Justices Brett Kavanaugh and Amy Coney Barrett, and the court docket’s three liberal justices, Sonia Sotomayor, Elena Kagan and Ketanji Brown Jackson, joined within the majority opinion.

The court docket’s two remaining conservative justices, Samuel Alito and Neil Gorsuch, dissented.

Thursday’s ruling “upholds a novel statutory scheme” permitting the CFPB to “bankroll its own agenda without any congressional control or oversight,” Alito groused in his dissent.

“In short, there is apparently nothing wrong with a law that empowers the Executive to draw as much money as it wants from any identified source for any permissible purpose until the end of time,” he wrote.

The majority’s ruling reversed a choice by the fifth Circuit U.S. Court of Appeals, which discovered the CFPB’s funding mechanism was unconstitutional.

Two commerce teams that characterize lenders, the Community Financial Services Association of America and the Consumer Service Alliance of Texas, had challenged the funding construction of the CFPB within the case.

This is breaking information. Please verify again for updates.

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