Key takeaways:
- The Supreme Court has agreed to review a case that could have a major impact on the Consumer Financial Protection Bureau (CFPB).
- The case centers around the Appropriations Clause of the Constitution, which states that “no money shall be drawn from the Treasury, but in consequence of appropriations made by law.”
- The Supreme Court’s decision could have a major impact on the CFPB and its regulations, and the court is expected to hear the case in the spring of 2021.
The Supreme Court has agreed to review a case that could have a major impact on the Consumer Financial Protection Bureau (CFPB). The case, CFPB v. Community Financial Services Association, et al., comes from the 5th U.S. Circuit Court of Appeals, where a three-judge panel of Trump-appointed judges ruled in October that the CFPB’s funding mechanism is unconstitutional.
The case centers around the Appropriations Clause of the Constitution, which states that “no money shall be drawn from the Treasury, but in consequence of appropriations made by law.” The CFPB is funded by the Federal Reserve, unlike most of the federal government’s agencies and departments, which are funded through congressional appropriations.
The CFPB was created in the wake of the financial crisis of 2008 and is the brainchild of Democratic Sen. Elizabeth Warren of Massachusetts. Since its creation, Republicans and corporate lobbyists have sought to destroy it.
The Supreme Court’s decision could have a major impact on the CFPB and its regulations. If the court rules that the CFPB’s funding structure is unconstitutional, it could mean the end of the agency and its regulations. The court is expected to hear the case in the spring of 2021.
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