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