Former Democratic economic policy officials ask Congress to preserve CFPB funding
They warn Supreme Court CFPB funding decision could affect other financial regulators
Thirty-two economic policy officials from the past two Democratic administrations are warning congressional leaders that an upcoming Supreme Court ruling on the Consumer Financial Protection Bureau’s funding mechanism could upend the entire financial regulatory system.
“The same legal arguments challenging the CFPB’s funding structure—that authorizing funding in a statute other than an annual appropriations bill is unconstitutional—could imperil the funding structure of the Federal Reserve Board and other federal regulators with similar funding mechanisms,” the group wrote.
The Supreme Court is expected to rule within the next two months on whether the agency’s funding mechanism violates the Constitution. The Community Financial Services Association of America is challenging the funding mechanism as part of their lawsuit of the agency’s payday lending rule.
The CFPB is funded by the Federal Reserve and not through the annual appropriations process. The National Credit Union Administration and other financial regulators also are not funded by appropriations; they are funded by fees paid by financial institutions.
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