Statement: Supreme Court’s delayed CFPB hearing casts lingering cloud for consumers

WASHINGTON — The U.S. Supreme Court announced Monday that it would take up the Solicitor General’s petition to hear CFPB v. CFSA during its next term. The Fifth Circuit Court of Appeals heard the case last year and declared the independent funding structure of the Consumer Financial Protection Bureau (CFPB) unconstitutional.

When Congress passed the Dodd-Frank Act 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 ignored the fact that every banking regulator in our country going back to the 1800s has had an independent source of funding. This precedent inoculates regulators and the economy, which is uniquely reliant on banking, from the undue influence of politics.

“If the CFPB has to rely on Congressional funding, the banking industry could try to influence members of Congress to withhold funding from 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.

“While a delayed hearing casts a lingering cloud of uncertainty over the CFPB’s ability to do its job and hurts consumers, we are confident that the CFPB’s current leadership will continue to keep the agency focused on protecting consumers, despite all the special interest efforts to shut it down.”