On October 3, the Supreme Court
heard oral argument in
Community Financial Services Association of America v. Consumer Financial Protection Bureau—a case presenting the most significant challenge yet to the constitutionality of the CFPB. As
previously covered by InfoBytes, a panel of the U.S. Court of Appeals for the Fifth Circuit agreed with the plaintiff industry groups that the CFPB’s funding structure violates the appropriations clause. At oral argument, the U.S. Solicitor General observed that the lower court decision was the “first time any court in our nation’s history has held that Congress violated the Appropriations Clause by enacting a statute providing funding.” She noted that Congress has approved similar “standing appropriations” for agencies including the U.S. Customs Service, the U.S. Post Office, and the U.S. Mint.
Several conservative justices pushed back against the CFPB’s and Solicitor General’s stance. For example, Chief Justice Roberts called it “very aggressive view” of Congress’ authority, and Justice Alito emphasized that the CFPB’s funding mechanism was unique in that its funding comes from the Federal Reserve, which is itself not funded through normal appropriations. However, Justice Thomas challenged counsel for the industry groups, noting that “we need a finer point” on “what the constitutional problem is,” beyond the uniqueness of the funding mechanism. Justice Barrett, too, stated she was “struggling to figure out” what standard courts might use in determining whether a cap on an agency’s appropriation is too high.
Find continuing InfoBytes coverage on Community Financial Services Association of America v. Consumer Financial Protection Bureau here.
