The Consumer Financial Protection Bureau's Lack of Candor to the Court, Continued

By Adam J. White Yale Journal on Regulation February 03, 2023

Having closely followed the Consumer Financial Protection Bureau since its inception, I’m struck by the arguments that the CFPB is now making to the Supreme Court. After all, they squarely contradict a decade’s worth of the CFPB’s own statements. I’ve detailed that on Notice & Comment and elsewhere, but here is one more example, involving a 2016 brief that the CFPB filed with the Government Accountability Office.

As I sketched out in an earlier post, the Dodd-Frank Act perpetually empowers the CFPB to claim nearly $1 billion dollars from the Federal Reserve annually, funds that would otherwise revert to the U.S. Treasury. All of this is a function not of appropriations laws, but of the Dodd-Frank Act of 2011, and it poses a real problem under the Constitution, which requires that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” 

As I suggested in my earlier post, this grant of perpetual power for the CFPB to fully fund itself seems an outright delegation of Congress’s power of the purse, allowing it to spend Treasury funds without appropriations by law.........To Read More...

How the U.S. Supreme Court Will Decide the Threat to CFPB’s Funding and Structure: Part I - The eyes of the consumer finance world are now on the Supreme Court as it decides whether to grant the CFPB’s certiorari petition in CFSA v. CFPB. In the decision, a Fifth Circuit panel held the CFPB’s funding mechanism violates the Appropriations Clause of the U.S. Constitution. We first review the background of CFSA’s lawsuit, the mechanism through which the CFPB is funded, and Congress’s policy rationale for the mechanism. We then examine the reasoning behind the Fifth Circuit’s conclusion that the funding mechanism is unconstitutional, the CFPB’s strategy in response to the decision, and the issues CFSA is expected to raise in a cross-petition for certiorari............

How the U.S. Supreme Court Will Decide the Threat to the CFPB’s Funding and Structure: Part II - The eyes of the consumer finance world are now on the Supreme Court as it decides whether to grant the CFPB’s certiorari petition in Consumer Financial Services Association Ltd. v. CFPB. In the decision, a Fifth Circuit panel held the CFPB’s funding mechanism violates the Appropriations Clause of the U.S. Constitution.................