Key Points
- The U.S. Court of Appeals for the Fifth Circuit ruled that the Consumer Financial Protection Bureau has an unconstitutional funding mechanism.
- The CFPB was the brainchild of Sen. Elizabeth Warren and passed as part of the 2010 Dodd-Frank law. It is funded through the Federal Reserve, thereby bypassing congressional appropriations. That didn’t fly with the appeals court.
- “Congress’s decision to abdicate its appropriations power under the Constitution, i.e., to cede its power of the purse to the Bureau, violates the Constitution’s structural separation of powers,” a three-judge panel of the 5th U.S. Circuit Court of Appeals ruled in a case brought by a payday lending group against the CFPB’s 2017 payday lending rule.
This is a lawless and reckless decision. @CFPB has returned billions of dollars to Americans by doing its job, and its funding is clearly constitutional. Extreme right-wing judges are throwing into question every rule the CFPB enforces to protect consumers and businesses alike. https://t.co/rktOfC46R5
— Elizabeth Warren (@SenWarren) October 19, 2022
ThinkCivics researches, examines, and reports on issues that matter most. We deliver explanative, fearless, and insightful analysis for public consumption.
