May 17, 2024

Supreme Court upholds the Obama era Consumer Financial Protection Bureau

The members of the U.S. Supreme Court have decided to uphold the Obama-era Consumer Financial Protection Bueau (CFPB). 

Fox News reports that the court did so in a 7-2 decision that it released on Thursday. The decision is authored by Justice Clarence Thomas.

The two dissenters are Justices Samuel Alito and Neil Gorsuch.

This is what makes this ruling so surprising for many. It breaks the narrative, always being pushed by Democrats and the mainstream media, that the court, with its conservative majority, has a conservative bias. If true, then surely the conservative justices would always be sticking together, but they very often don't.

What's going on?

For those unfamiliar with the CFPB, Fox explains, "The CFPB launched in 2008 with the help of Sen. Elizabeth Warren, D-Mass., in the aftermath of the market crash, with authority to regulate banking and lending agencies via federal rules."

In other words, the CFPB's general purpose is to protect consumers.

Not the CFPB, but, rather, the funding mechanism for the CFPB was recently legally challenged by a group of banking associations represented by Noel Francisco, a former solicitor general. Fox explains that they argued that "because the agency, not Congress, decides the amount of annual funding and draws it from the Federal Reserve, it violates the Appropriations Clause."

The case made it up to the Supreme Court, and, there, the justices rejected this argument.

Thomas, on behalf of the majority, wrote:

Although there may be other constitutional checks on Congress’ authority to create and fund an administrative agency, specifying the source and purpose is all the control the Appropriations Clause requires. The statute that authorizes the Bureau to draw money from the combined earnings of the Federal Reserve System to carry out its duties satisfies the Appropriations Clause.

Warren is happy, but not everyone agrees

Among those who disagree are Justices Alito and Gorsuch.

The Hill reports that Alito, in his dissent, wrote, "Unfortunately, today’s decision turns the Appropriations Clause into a minor vestige. The Court upholds a novel statutory scheme under which the powerful Consumer Financial Protection Bureau (CFPB) may bankroll its own agenda without any congressional control or oversight."

The justice went on to write that "the Framers would be shocked, even horrified, by this scheme."

Perhaps the craziest part about all of this, though, is that progressive Sen. Elizabeth Warren (D-MA) actually is very happy with the decision released by the conservative Supreme Court.

"The United States Supreme Court followed the law, and the CFPB is here to stay. This is so terrific. This news is fabulous," she said.

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