The Consumer Financial Protection Bureau has fired its opening salvo in defense of its funding structure, arguing in its brief to the Supreme Court that the ruling from the Court of Appeals for the Fifth Circuit was “flawed” and “has no support in text, history, or precedent” and should be overturned.
A copy of the brief in the case of Consumer Financial Protection Bureau v. Community Financial Services Association of America et al. can be accessed by clicking here.
The CFPB petitioned the Supreme Court to hear arguments in its appeal after the Fifth Circuit ruled last year that the Bureau’s funding structure was unconstitutional and that Congress had “abdicated” its powers. The CFPB’s budget is not part of the Congressional appropriations process; it receives its funding through the Federal Reserve Board, which was an intentional decision made by lawmakers when the CFPB was created a dozen years ago. The architects of the Consumer Financial Protection Act wanted the agency to be independent and not subject to the whims of whichever political party happened to be in control at the time.
Arguments in the case will be heard during the Supreme Court’s next session, which begins in October. A ruling is not expected until the Spring of 2024.
The CFSA and the other respondents have “offered no evidence that the Founders intended the Appropriations Clause as a limit on Congress’s power to pass laws providing funding to agencies,” the CFPB wrote in its brief. “Nor have they cited any precedent suggesting as much.”
A number of other regulators and departments of the federal government are not part of the annual appropriations process, the CFPB pointed out. Where Congress imposed a cap on how much the CFPB could ask for from the Federal Reserve Board — $598 million, adjusted for inflation — other regulators, like the Office of the Comptroller of the Currency, which regulates national banks, has no such limit.