For Immediate Release
October 3, 2023
Future of U.S. Financial Regulation Hinges on Supreme Court Case
Today, the U.S. Supreme Court heard oral arguments in CFPB v. Community Financial Services Association of America, Limited. Below is the statement of Ira Rheingold, Executive Director, National Association of Consumer Advocates:
“The U.S. Supreme Court heard oral arguments today in a case where a bad decision could upend the funding structure and soundness of the Consumer Financial Protection Bureau and other financial regulators. The Court heard the government’s appeal of an extreme Fifth Circuit Court of Appeals’ decision that held that the Bureau’s funding structure under the Federal Reserve System violated the U.S. Constitution’s Appropriations Clause.
The justices appeared skeptical as they considered the payday lending industry’s uneven arguments urging it to uphold the Fifth Circuit’s ruling. The U.S. government, presenting the Constitutional text, law, and history, and the potential consequences for other financial regulators, set forth a strong argument in favor of reversing the lower court’s imprudent decision.
Congress, following the 2007-2009 financial crisis, determined that the CFPB, which it created in the 2010 financial reform law, should have certain fundamental characteristics, including funding under the Federal Reserve System, in the same vein as other federal financial regulators.
Congress determined that the bureau needs reliable and predictable funding to adequately monitor and protect the consumer finance market, and hold bad actors accountable, including lenders involved in this case who prey on American consumers with predatory high-cost loans.”