SCOTUS Upholds Consumer Watchdog's Funding Mechanism

Facts

• The US Supreme Court (SCOTUS) ruled 7-2 on Thursday that the Consumer Financial Protection Bureau's funding structure doesn't violate the Appropriations Clause of the Constitution.¹
• Most federal agencies receive funding from Congress, while the CFPB can fund itself by withdrawing up to 12% of the Federal Reserve's operating expenses.²
• Drawing on English, colonial, and early American history, Justice Clarence Thomas ruled that 'an identified source and purpose are all that is required for a valid appropriation.'³
• However, Justices Samuel Alito and Neil Gorsuch dissented from the ruling, arguing that it 'upholds a novel statutory scheme under which the powerful [CFPB] may bankroll its own agenda without any congressional control or oversight.'⁴
• The CFPB was first sued in 2018. A lower court ruled in its favor after it amended its ban on loan providers withdrawing funds from customers with insufficient balances. However, an appeals court later ruled the agency's funding mechanism illegal.⁵
• In 2022, the CFPB, which was founded in 2008, withdrew about $641.5M of its then-applicable $734M limit from the Federal Reserve.⁶

Sources: ¹CNN, ²wsj.com, ³New York Times, ⁴FOX News, ⁵NBC and ⁶CBS.

Narratives

• Narrative A, as provided by Consumer Financial Protection Bureau. SCOTUS has upheld the CFPB's congressionally-appointed authority to protect Americans from predatory financial companies. This ruling, based on historical precedent, allows the consumer watchdog to continue its legacy of handling millions of complaints and providing billions of dollars in relief to the American people.
• Narrative B, as provided by National Review. Unfortunately, this ruling is in line with the Constitution, but that means it's up to Congress to make a change. Just because the CFPB is allowed to fund itself via the Federal Reserve doesn't mean it should. By handing virtually all of its Constitutional budgetary powers to the executive branch, Congress has allowed these agencies to become bloated and unregulated.

Predictions