Here’s what the regulator and members of Congress are saying about the case originating from a challenge to the CFPB’s payday lending rule.
05/17/2024 1:50 P.M.
2.5 minute read
Members of Congress and the Consumer Financial Protection Bureau reacted across the board to the highly-anticipated U.S. Supreme Court decision on the bureau’s funding structure in Consumer Financial Protection Bureau v. Community Financial Services Association of America Ltd. (CFSA) issued May 16.
The 7-2 decision (PDF) concludes that the funding of the bureau through the Federal Reserve is constitutional and reverses an October 2022 decision in the CFSA case from the 5th Circuit Court of Appeals.
The majority opinion in the case states, “The statute that provides the Bureau’s funding meets these requirements. We therefore conclude that the Bureau’s funding mechanism does not violate the Appropriations Clause.”
Members of the House Financial Services Committee, which holds two hearings per year to hear the semiannual report of the CFPB from the director and has considered multiple bills related to the bureau related to its funding and oversight, shared their comments on the case outcome.
“Despite the setback from today’s ruling, Republicans will continue the fight to rein in the rogue CFPB,” said Committee Chairman Patrick McHenry, R-N.C., in a news release. “To be clear, this Supreme Court opinion yet again emphasizes that Congress has exclusive authority and discretion over federal agencies’ funding structures. The House must urgently take up Congressman Andy Barr’s CFPB Transparency and Accountability Reform Act. This commonsense legislation will fix the mistakes of Dodd-Frank which set the dangerous precedent of tapping the central bank to fund partisan political objectives. It’s past time the CFPB is held accountable to the American people through their elected representatives.”
U.S. Rep. Maxine Waters, D-Calif., ranking member of the committee, said in a news release, “The Court has also affirmed what we’ve always known, which is that the funding structure of the CFPB is constitutional. Efforts to question the funding structure of the CFPB were a part of a long-term strategy by right-wing extremists to defund other agencies that are critical to our economy, including the Federal Reserve and other banking regulators, which like the CFPB, are also funded outside of annual appropriations.”
Finally, the CFPB issued a statement.
“Today’s decision is a resounding victory for American families and honest businesses alike, ensuring that consumers are protected from predatory corporations and that markets are fair, transparent, and competitive.
“This ruling upholds the fact that the CFPB’s funding structure is not novel or unusual, but in fact an essential part of the nation’s financial regulatory system, providing stability and continuity for the agencies and the system as a whole. As we have done since our inception, the CFPB will continue carrying out the vital consumer protection work Congress charged us to perform for the American people.”
ACA is reviewing the Supreme Court’s opinion for additional analysis for members in ACA Daily and on the ACA Huddle.
Members can access ACA’s initial report here.
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