On May 16, Justice Thomas issued the majority opinion in which the Supreme Court held, by a 7-2 vote, that the CFPB’s funding mechanism comported with the Appropriations Clause of the Constitution which states, in relevant part, in Article I, Section 9, Clause 7:

“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law…”

Specifically, Justice Thomas held:

“Under the Appropriations Clause, an appropriation is simply a law that authorizes expenditures from a specified source of public money for designated purposes.… Continue Reading

The U.S. Supreme Court’s ruling last week in CFSA v. CFPB that the CFPB’s funding mechanism does not violate the Appropriations Clause of the U.S. Constitution removes what many observers consider to be the last remaining existential threat to the agency.  The ruling will have a broad impact on the CFPB’s activities. … Continue Reading

On May 16, 2024, the U.S. Supreme Court ruled in Community Financial Services Association of America Ltd. v. Consumer Financial Protection Bureau that the CFPB’s funding mechanism does not violate the Appropriations Clause of the U.S. Constitution.  The Supreme Court’s decision has far-ranging implications, most immediately for cases involving challenges to CFPB regulations or other CFPB actions. … Continue Reading

After bouncing from the Texas federal district court to the D.C. federal district court to the Fifth Circuit and back again to the Texas federal district court, the industry lawsuit challenging the CFPB’s credit card late fee rule (Rule) is poised for another round of possible twists and turns in the wake of the U.S.… Continue Reading

On May 16, 2024, the U.S. Supreme Court, in a 7-2 decision, ruled that the CFPB’s funding mechanism does not violate the Appropriations Clause of the U.S. Constitution. That ruling is discussed here.

Shortly after the ruling, the CFPB issued a statement about the decision. It stated that “The Supreme Court has rejected [the] radical theory that would have devastated the American financial markets.… Continue Reading

Florida Bankers Association President and CEO and former Director of the Consumer Financial Protection Bureau (CFPB) Kathy Kraninger wrote an editorial in the May 14, 2024 American Banker titled “CFPB Must Stop Manipulating Data to Support Its Policy Preferences.” Kraninger served as Director of the CFPB from December 2018 to January 2021.… Continue Reading

The U.S. Supreme Court, in a 7-2 decision, ruled today that the CFPB’s funding mechanism does not violate the Appropriations Clause of the U.S. Constitution. 

In the Dodd-Frank Act, Congress provided that the CFPB would receive annual funding from the combined earnings of the Federal Reserve System.  Each year, the Federal Reserve Board is directed to transfer to the CFPB an amount determined by the CFPB Director to be reasonably necessary to carry out the CFPB’s authorities, with that amount not to exceed 12% of the Federal Reserve’s total operating expenses as reported in 2009 (approximately $600 million) as adjusted for inflation.  … Continue Reading

Yesterday, the Texas federal district court hearing the industry lawsuit challenging the CFPB’s final credit card late fee rule (Rule) issued the following unusual order:

On March 10, 2024, this Court granted Plaintiffs’ Motion for Preliminary Injunction.  The Court therefore has questions concerning the live causes of actions in this case and what next steps are appropriate to move the case along.… Continue Reading

Last Friday, May 10, the Texas federal district court hearing the lawsuit challenging the CFPB’s final credit card late fee rule (Rule) granted the plaintiffs’ preliminary injunction motion and stayed the Rule.  The Rule was set to become effective tomorrow, May 14.  The district court’s ruling followed the entry of an order by the Fifth Circuit vacating the district court’s order denying the plaintiffs’ motion for expedited consideration of their preliminary injunction motion and remanding the case to the district court with instructions to rule on the plaintiffs’ preliminary injunction motion by May 10.… Continue Reading