The Supreme Court handed down a crucial decision on Thursday, affirming the legality of the undfing structure of the Consumer Financial Protection Bureau (CFPB). In a 7-2 ruling, the Court dismissed arguments contending that the CFPB’s funding method violated the U.S. Constitution because Congress does not allocate funds for the agency on an annual basis, as it does for other executive branch entities.
Instead, Congress granted the CFPB the authority to derive its funding from the Federal Reserve system. This decision shields the CFPB from potential jeopardy, as there was a looming risk that, in a deeply divided Congress, Republicans could obstruct yearly appropriations for the agency.
BREAKING: The Supreme Court just upheld the Consumer Financial Protection Bureau's funding structure in a 7-2 ruling.
Here's a funny clip we caught from the CFPB hearing last year.
Congressman: Banks are not happy with the CFPB. Why aren’t you doing a better job of serving the… pic.twitter.com/EGb4snJSJR
— Quiver Quantitative (@QuiverQuant) May 16, 2024
For President Joe Biden, this ruling marks a significant victory. Biden, currently campaigning for a second term against former President Donald Trump, has utilized the CFPB to advance key aspects of his economic agenda.
Justice Clarence Thomas, writing for the majority, asserted, “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 [Constitution’s] Appropriations Clause.” He emphasized that specifying the source and purpose of funding is sufficient control as per the Appropriations Clause.
Joining Thomas in the majority opinion were Chief Justice John Roberts, Justices Brett Kavanaugh, Amy Coney Barrett, Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson. Justices Samuel Alito and Neil Gorsuch dissented, with Alito expressing concerns about the lack of congressional oversight over the CFPB’s funding.
The Court’s decision overturned a 2022 ruling by the 5th Circuit U.S. Court of Appeals, which had deemed the CFPB’s funding mechanism unconstitutional.
The Supreme Court today issued a disappointing ruling in CFPB v. Community Financial Services Association of America, a lawsuit challenging the unchecked funding of the Consumer Financial Protection Bureau (CFPB). CEI experts weigh in: https://t.co/k8J1vZudQR
— Competitive Enterprise Institute (@ceidotorg) May 16, 2024
In response to the ruling, a CFPB spokesperson hailed it as “a resounding victory for American families and honest businesses alike,” underscoring the agency’s role in protecting consumers from predatory practices and maintaining fair and competitive markets.
Established by Congress following the 2008 financial crisis, the CFPB is tasked with enforcing consumer protection laws and ensuring fairness in the consumer financial products and services market. Its funding structure was deliberately designed to shield it from political influence by not relying on yearly appropriations from Congress.
Two trade groups representing lenders, the Community Financial Services Association of America and the Consumer Service Alliance of Texas, contested the CFPB’s funding structure in the case brought before the Supreme Court.
During the Biden administration, the CFPB has been embroiled in several notable political disputes over its regulatory initiatives, including efforts to protect consumers from credit card late fees. Despite a federal judge in Texas halting the implementation of a rule capping these fees at $8, Senate Banking Committee Chair Sherrod Brown of Ohio praised Thursday’s ruling, asserting that powerful corporate interests had attempted to dismantle the CFPB through legal means, but had ultimately failed. Brown emphasized the agency’s role in safeguarding workers and consumers who lack the resources to defend themselves against corporate influence.
- Get the Spike Support formula to help you clean your blood out of spike proteins from the vaccine. Proven to clean blood and save lives. 👍 – Whatfinger Sponsor
- Dr. Zelenko is the man who advised Trump on Hydroxy ..Here’s his recipe to keep immunity strong – Zelenko Z Stack
Main Points…
- The Supreme Court upheld the legality of the Consumer Financial Protection Bureau’s funding structure in a 7-2 decision.
- Arguments claiming the funding method violated the Constitution were dismissed, as Congress authorized the CFPB to draw funds from the Federal Reserve system.
- This ruling protects the CFPB from potential defunding by a divided Congress and is seen as a win for President Biden, who has used the agency to advance his economic agenda.
- Justice Clarence Thomas, writing for the majority, emphasized that specifying the funding source and purpose is sufficient control as per the Appropriations Clause.
- Despite dissent from Justices Alito and Gorsuch, the Court’s decision overturns a previous ruling and reaffirms the CFPB’s role in enforcing consumer protection laws and maintaining fair markets.
Written by Jennifer Guerrero – Reprinted with Permission of Whatfinger News
