A group of Congressional Democrats have filed an amicus brief in the U.S. Supreme Court defending the Consumer Financial Protection Bureau (CFPB) in a court case.
The brief was filed in support of the bureau in the case filed by the Community Financial Services Association of America, which seeks to challenge the constitutionality of the CFPB’s funding structure and undercut the agency’s regulatory authority to protect consumers.
“As the United States explains, accepting the Fifth Circuit’s decision would place at risk a funding model that has been used since the early Republic, which now applies to the OCC and a host of other crucial federal programs,” the lawmakers wrote in the brief.
It was signed by 38 current and former senators including U.S. Sens. Sherrod Brown (D-OH), Chuck Schumer (D-NY), and Dick Durbin (D-IL), as well as more than 100 current and former members of the House, including Reps. Maxine Waters (D-CA), Hakeem Jeffries (D-NY), and Nancy Pelosi (D-CA).
The amicus brief argues that since the country was founded, Congress has used its appropriations powers in different ways. In addition, it argues that the CFPB must maintain its independent funding so that it can continue the work of protecting consumers.
When the CFPB was established after the 2008 financial crisis, a judgment was made that the CFPB, like other financial regulators, needed independence from unpredictable annual funding cycles to be effective. Thus, the CFPB is funded through the Federal Reserve System. Congress still maintains oversight authority of the CFPB, and it testifies regularly before Congress.
“Armed with its assessment of what went wrong in the financial crisis, Congress determined that to be effective, the CFPB needed independence from unpredictable annual funding cycles,” the lawmakers added.