Signage at the Consumer Financial Protection Bureau (CFPB) Headquarters in Washington, DC
andrew kelly | Reuters
WASHINGTON — More than 140 current and former Democratic lawmakers have filed a amicus brief in the Supreme Court on Monday to defend the nation’s top consumer protection agency against challenges from its regulator.
The brief — led by Democratic Sen. Sherrod Brown of Ohio and Rep. Maxine Waters of California — concerns Consumer Financial Protection Bureau v. Community Financial Services Association of America, which is challenging the agency’s constitutionality and would undermine its funding and mandated powers.
Brown chairs the Senate Banking Committee, while Waters is the senior member of the House Financial Services Committee.
Upholding an appeals court decision undermining the agency’s funding mechanism “would jeopardize a funding model used since the beginning of the Republic, which now applies to the [Office of the Comptroller of the Currency] and a host of other crucial federal programs,” the lawmakers wrote.
Representative of House Minority Democratic Leader Hakeem Jeffries and Senate Majority Leader Chuck Schumer, both of New York, as well as Senate Majority Whip Dick Durbin, D-Ill., and Speaker emeritus Nancy Pelosi, D-Calif., are among 144 current and former members of Congress who signed the brief.
Ten consumer defense organizations have also filed an amicus brief with the Supreme Court this month in support of the CFPB.
The Supreme Court agreed to hear arguments in the case in February, four months after a federal appeals court panel unanimously ruled that the CFPB’s funding method was unconstitutional.
Congress decided to fund the CFPB, which was created by the 2010 Dodd-Frank Act after the 2008 financial crisis, from the Federal Reserve for “necessary independence from unpredictable annual funding cycles,” according to the memory.
Although the CFPB bypasses the annual appropriations process, its director is required to justify his budget to the House every two years, the lawmakers wrote, and Congress has set an annual cap on the agency’s budget at a level ” modest” using a portion of Federal Reserve revenue.
In the October ruling, Judge Cory Wilson, a member of the three-judge panel for the 5th Circuit Court of Appeals, called the funding mechanism a “scheme” that is “unique among the myriad of independent executive agencies of the federal government”.
The Biden administration has appealed the 5th Circuit’s ruling to the Supreme Court, but a final ruling could be delayed until June 2024 to hear further arguments in the case. In the brief, lawmakers succinctly concluded that “the judgment should be set aside.”