Supreme Court upholds CFPB funding

The U.S. Supreme Court today, in a 7-2 decision, ruled in favor of the Consumer Financial Protection Bureau, rejecting a challenge brought by payday lenders to Congress’s decision about how to fund the agency.

The case came to the Court after the Fifth Circuit Court of Appeals’ unprecedented ruling that funding for the Bureau’s violates the U.S. Constitution’s Appropriations Clause, which states that the federal government may spend money to fund an activity only when Congress has passed a law “appropriating” funds for that activity.

As Public Citizen explained in an amicus brief supporting the Bureau, the CFPB’s funding statute satisfies the requirements of the Appropriations Clause: It specifies the source from which the CFPB may draw funds, the amount it may draw, and the purposes for which the funds may be spent. That the funds come from a source other than general federal revenues poses no constitutional concern. Congress has long appropriated to agencies funds derived from fees, assessments, and other revenues attributable to agency activities.

The outcome of the case ensures that the Bureau’s work protecting consumers in areas concerning credit cards, payday lending, home buying, and debt collection can continue.

Leave a Reply

Your email address will not be published. Required fields are marked *