Supreme Court Decision Could End Watchdog Bureau

Facts

• In a few weeks, the US Supreme Court will hear oral arguments in the case of Consumer Financial Protection Bureau (CFPB) v. Community Financial Services Association of America Ltd. — a challenge to the funding structure of the CFPB. CFPB is a federal consumer protection watchdog that has focused on issues ranging from payday lenders to student loan lenders.¹
• The case, which will be heard Oct. 3, is an appeal by the Biden administration of a Fifth Circuit court ruling that said the funding structure is unconstitutional.¹
• Lobbyists for the payday loan industry filed suit challenging a 2017 CFPB regulation that stops lenders from attempting to charge a borrower’s bank account after two failed attempts to access funds.²
• CFPB won the case in federal court in 2021, but the three-judge Fifth Circuit — all nominated by former Pres. Trump — reversed course.²
• The Fifth Circuit determined that the CFPB budget must be appropriated annually by Congress despite it already reporting directly to Congress and being audited regularly.³
• The Biden administration warned that the lower court’s ruling would “inflict immense” harm on the agency, consumers, and the US financial sector.⁴

Sources: ¹Business Insider, ²Reuters, ³NPR Online News and ⁴Associated Press.

Narratives

• Democratic narrative, as provided by Intercept. The Republican Party continues to prove it has little regard for what its voters want and is only interested in protecting businesses — even those that prey on consumers. The CFPB is popular with Republican voters, but that hasn’t stopped the party from conducting a yearslong campaign to dismantle the agency, including this case.
• Republican narrative, as provided by Wall Street Journal. Democrats don't implement policies that actually protect consumers.  These measures are about implementing stifling regulations — even ones that violate the Constitution. Luckily the courts can restrain overregulation and prevent Democrats' attempt to push the US from healthy capitalism to unhealthy socialism.