Supreme Court Lets CFPB Funding Stand

May 16, 2024 | Updated 2:09 pm

The Supreme Court rejected a challenge on Thursday to the way the Consumer Financial Protection Bureau (CFPB) is funded.

The court ruled in Consumer Financial Protection Bureau v. DACA International Inc. that the CFPB's funding structure is constitutional. The Biden administration appealed to the Supreme Court in 2022 after the Court of Appeals for the DC Circuit affirmed the CFPB's funding structure. The Supreme Court's 7-2 decision reversed a lower court's ruling that the CFPB's funding design—drawing money each year from the Federal Reserve instead of through annual appropriations from Congress—was unconstitutional.

The CFPB is an independent agency that was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The CFPB is responsible for protecting consumers from financial fraud and abuse. The agency has been controversial since its inception, with critics arguing that it is too powerful and unaccountable to Congress.

The Supreme Court's decision is a significant victory for the Biden administration and the CFPB. The ruling means that the CFPB will be able to continue to operate without having to rely on annual appropriations from Congress. This will give the CFPB more independence and allow it to better protect consumers from financial harm.