The Supreme Court on Thursday rejected a broad challenge to the Consumer Financial Protection Bureau, reversing a lower-court ruling that would have undermined the watchdog agency created by Congress 12 years ago.
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The CFPB case is one of several the Supreme Court heard this term that challenge the power of federal agencies, long a target of conservatives concerned about regulation and government bureaucrats whom they see as unaccountable to the public.
The case involved a decision by the conservative U.S. Court of Appeals for the 5th Circuit that said the funding mechanism Congress adopted to ensure the CFPB’s independence was unconstitutional. A panel of three judges, all nominated by President Donald Trump, ruled in 2022 that the mechanism violated the Constitution’s command requiring congressional appropriation of money. The decision said the agency’s insulation from congressional committees doubled the violation.
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The Biden administration rejected 5th Circuit’s view, telling the justices that the Constitution bestowed the power of the purse to Congress but set few limits on how appropriations could be made. Upholding the appeals court decision could have implications for the funding of other regulatory agencies, the government said, including the Federal Reserve Board, and could even cast doubt on Social Security and payments to the national debt.
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The CFPB said it has recovered more than $20 billion for consumers since it was was created by Congress in response to the 2008 financial crisis, putting scattered federal consumer protections under one structure. Sen. Elizabeth Warren (D-Mass.), who at the time advised the Obama administration, played a lead role in the legislation.
http://www.washingtonpost.com/polit...tid=mc_magnet-scotus2024_inline_collection_17
The Dodd-Frank Wall Street Reform and Consumer Protection Act moved to insulate the CFPB from political influence by making the agency independent from Congress’s annual appropriation process. The agency instead is funded from the profits of the Federal Reserve, which itself is funded through bank assessments. The bureau’s budget may not exceed 12 percent of the Fed’s annual operating expenses. So far, the agency has not asked for all of its authorized budget in any given year.
The case is Consumer Financial Protection Bureau v. Community Financial Services Association of America.
This is a developing story. It will be updated.
Cut through the 2024 election noise. Get The Campaign Moment newsletter.
The CFPB case is one of several the Supreme Court heard this term that challenge the power of federal agencies, long a target of conservatives concerned about regulation and government bureaucrats whom they see as unaccountable to the public.
The case involved a decision by the conservative U.S. Court of Appeals for the 5th Circuit that said the funding mechanism Congress adopted to ensure the CFPB’s independence was unconstitutional. A panel of three judges, all nominated by President Donald Trump, ruled in 2022 that the mechanism violated the Constitution’s command requiring congressional appropriation of money. The decision said the agency’s insulation from congressional committees doubled the violation.
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The Biden administration rejected 5th Circuit’s view, telling the justices that the Constitution bestowed the power of the purse to Congress but set few limits on how appropriations could be made. Upholding the appeals court decision could have implications for the funding of other regulatory agencies, the government said, including the Federal Reserve Board, and could even cast doubt on Social Security and payments to the national debt.
Follow Election 2024
The CFPB said it has recovered more than $20 billion for consumers since it was was created by Congress in response to the 2008 financial crisis, putting scattered federal consumer protections under one structure. Sen. Elizabeth Warren (D-Mass.), who at the time advised the Obama administration, played a lead role in the legislation.
http://www.washingtonpost.com/polit...tid=mc_magnet-scotus2024_inline_collection_17
The Dodd-Frank Wall Street Reform and Consumer Protection Act moved to insulate the CFPB from political influence by making the agency independent from Congress’s annual appropriation process. The agency instead is funded from the profits of the Federal Reserve, which itself is funded through bank assessments. The bureau’s budget may not exceed 12 percent of the Fed’s annual operating expenses. So far, the agency has not asked for all of its authorized budget in any given year.
The case is Consumer Financial Protection Bureau v. Community Financial Services Association of America.
This is a developing story. It will be updated.
