Consumer Financial Protection Bureau v. Community Financial Services Ass’n of America
Issues
Does the Consumer Financial Protection Bureau’s funding structure violate the Constitution’s Appropriations Clause because it draws money directly from the Federal Reserve’s proceeds, and, if so, should the Court vacate its Payday Lending Rule?
This case asks the Supreme Court to decide whether the Consumer Financial Protection Bureau’s (“CFPB”) funding structure is constitutional under the Appropriations Clause. The CFPB argues that the text of the Appropriations Clause, in conjunction with its historical and modern understandings, supports its existing funding structure. Consumer Financial Services Association of America counters that the Appropriations Clause requires Congress to make a valid appropriation, and the current funding structure does not satisfy this requirement. The outcome of this case has serious implications for the regulation of financial markets and for consumers who borrow from financial institutions.
Questions as Framed for the Court by the Parties
Whether the court of appeals erred in holding that the statute providing funding to the Consumer Financial Protection Bureau, 12 U.S.C. § 5497, violates the appropriations clause in Article I, Section 9 of the Constitution, and in vacating a regulation promulgated at a time when the Bureau was receiving such funding.
After the financial crisis of 2008, Congress enacted the Consumer Financial Protection Act which created the Consumer Financial Protection Bureau (“CFPB”). 12 U.S.C. §§ 5481–5603.
The authors would like to thank Professor Jed Stiglitz for his guidance and insights into this case.
Additional Resources
- Tom Laser & Francis X. Riley, III, CFSA v. CFPB Certiorari Arguments, JDSupra (February 15, 2023).
- Adam Liptak, Supreme Court to Take Up Case on Fate of Consumer Watchdog, New York Times (February 27, 2023).
- Eamonn Moran, Thomas J. Delaney & Stephen Aschettino, US Supreme Court Agrees to Hear Challenge to CFPB’s Funding Structure, Norton Rose Fulbright (February 2023).
- Rachel Rodman, Keith Gerver & Kathleen Comerford, CFPB Enforcement Lags in Federal Court Due to Supreme Court Case, Bloomberg Law (July 20, 2023).