October 21, 2022
For Immediate Release:
NACA Denounces Court Ruling Stripping CFPB of Its Funding Source
WASHINGTON, D.C.– This week, the Fifth Circuit Court of Appeals issued a decision in Community Financial Services Association of America v. Consumer Financial Protection Bureau, which held that the Consumer Financial Protection Bureau’s funding under the Federal Reserve System was unconstitutional.
Ira Rheingold, executive director of the National Association of Consumer Advocates issued the following statement in response to the Fifth Circuit’s ruling.
“The Fifth Circuit’s decision this week answered the call of opponents of vigorous consumer financial protection and who have long wanted to rob the CFPB of its independence and instead, relegate it to the often-messy congressional appropriations process and the heavy influences of well-financed corporate lobbyists.
The court’s disturbing decision, claiming that Congress does not have sufficient authority over the bureau because its funding does not come from the congressional appropriations process, is both deeply cynical and without any legal merit. Congress, following the 2007-2009 financial crisis, clearly and thoughtfully determined that the new financial regulatory agency it was creating, should have certain fundamental characteristics, including meaningful independence and 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, as well as to respond to lawbreakers, such as the lenders who prey on American consumers with predatory high-cost loans – as is absolutely clear from the facts in this case.
Unfortunately, this week, the rule of law was distorted, and the Court issued a decision that simply favors politically powerful financial industry interests over the will of Congress, the public interest, and the millions of individuals and families that the bureau serves.
Despite this dangerous decision, the fight to preserve and maintain the bureau’s independence and its ability to achieve a fair, fraud-free financial marketplace is far from over.”