Statement: Consumer Financial Protection Bureau funding follows precedent

Consumer advocates decry appellate court ruling

WASHINGTON — The Consumer Financial Protection Bureau’s funding source was deemed unconstitutional Wednesday in a ruling by a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit. 

When Congress passed the Dodd-Frank law that created the CFPB in 2010, the law provided for CFPB funding through the Federal Reserve — not Congressional appropriations.

In response, Mike Litt, U.S. PIRG’s Consumer Campaign Director, released the following statement:

“The appeals court ruling ignores the fact that every banking regulator in our country has had an independent source of funding. This precedent goes back to the 1800s to inoculate regulators and the economy, which is uniquely reliant on banking, from the undue influence of politics.

“Otherwise, members of Congress who are funded by the banking industry could threaten to withhold funding from banking regulators unless they do their bidding.

“Congress created the CFPB in the wake of the 2008 economic crash and set it up for success by making sure it could serve consumers without being manipulated by the very industry it is meant to rein in. 

“Making the CFPB the only banking regulator subject to Congressional appropriations would put the most pro-consumer federal agency at risk of being starved of the funding it needs to protect consumers.”