Supreme Court Upholds CFPB's Funding and Authority

Court upholds funding, structure of Consumer Financial Protection Bureau

Consumer advocates are hailing a decision by the U.S. Supreme Court that will allow the Consumer Financial Protection Bureau (CFPB) to continue conducting business with a steady stream of funding.

The ruling comes in a case brought to the Supreme Court by a trade association representing payday lenders. The Consumer Financial Services Association sought to challenge the authority of the CFPB to regulate payday lenders by suggesting the regulator's funding mechanism. In a 7-2 decision, the Supreme Court held that the CFPB's funding structure is legal and the CFPB retains its Congressionally-granted authority to regulate financial commerce.

Groups representing consumers expressed support for the decision.

In a statement released to the media, Jesse Van Tol, President and CEO of the National Community Reinvestment Coalition said:

“It’s always nice to see the courts get something right – especially in this tawdry circumstance where payday loan predators sought to wriggle out of basic oversight using absurd distortions of law and fact. But this vindication of the CFPB’s existence and funding structure is especially meaningful because of its positive repercussions all across our economy."

A statement from Americans for Financial Reform suggests the legal effort by payday lenders would have harmed consumers if it had been successful.

“The Supreme Court has refused to bless the radical and ungrounded argument from the payday lenders that the CFPB’s funding mechanism is unconstitutional, which is good news for people and communities across the country,” said Lisa Donner, executive director at Americans for Financial Reform Education Fund. “This decision removes a major threat to the agency’s work, and reaffirms the independence that allows it to continue standing up for the public interest against abusive financial practices.”

The National Consumer Law Center (NCLC) said the ruling will ensure working people are protected from predators in the financial marketplace.

“The CFPB can now fully focus on its essential work protecting hard-working people from predatory practices and discrimination in financial services,” said Richard Dubois, executive director of the National Consumer Law Center. “The Court was wise to recognize that the plaintiffs’ self-serving attack on this important consumer watchdog was not justified or legal. The CFPB’s valuable work to address junk fees, medical debt on credit reports, and fair housing and language access, among other important issues, can continue unimpeded.”

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