On October 3, 2023, the Supreme Court of the United States (SCOTUS) heard arguments in Consumer Financial Protection Bureau v. Community Financial Services Association of America on whether the statute providing funding to the Consumer Financial Protection Bureau (CFPB) violates the appropriations clause in Article I, Section 9 of the U.S. Constitution.
“The justices were divided at oral argument on Tuesday in a challenge to the constitutionality of Congress’s decision to provide funding for the Consumer Financial Protection Bureau through the Federal Reserve, rather than the normal annual appropriations process,” noted Amy Howe in her article “Court divided over funding mechanism for consumer watchdog.”
“A federal appeals court in Texas ruled earlier this year that the CFPB’s funding structure violates Article I, Section 9 of the Constitution, known as the appropriations clause, which provides that ‘[n]o money shall be withdrawn from the Treasury, but in Consequence of Appropriations made by Law.'” Howe wrote it was “not clear” if SCOTUS would affirm that decision.
“With the focus squarely on whether the agency’s funding mechanism violates the appropriations clause, the court spent relatively little time on what should happen if a majority agrees with the lower court that it does,” Howe explained, adding that a U.S. Solicitor General defending the CFPB “urged the justices to avoid a sweeping ruling” like the appeals court’s ruling.
The case began as a challenge by two industry groups to a 2017 rule regulating payday lenders and a decision is expected in 2024. The CFPB was created by the “Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010” and has the authority to take action against institutions violating consumer financial laws including the Fair Credit Reporting Act (FCRA).
ClearStar is a leading global Human Resource technology company specializing in background checks, drug testing, and occupational health screening. ClearStar offers “better, easier, safer, and faster” pre-employment screening solutions for businesses that comply with regulations from the CFPB and FCRA. For more information about ClearStar, contact us today.
The article “Court divided over funding mechanism for consumer watchdog” was originally published at Howe on the Court.
© 2023 ClearStar. All rights reserved. – Making copies of or using any part of the ClearStar website for any purpose is prohibited unless written authorization is first obtained from ClearStar. ClearStar does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.
Let's start a conversation
Thomas Ahearn - Digital Content Editor
Thomas Ahearn is a Digital Content Editor at ClearStar, a leading Human Resources technology company specializing in background checks, drug testing, and occupational health screening. He writes about a variety of topics in the background screening industry including Artificial Intelligence (AI), "Ban the Box," class action lawsuits, credit reports, criminal records, drug testing, Equal Employment Opportunity Commission (EEOC), Fair Credit Reporting Act (FCRA), identity theft, privacy, social media screening, and workplace violence.
At ClearStar, we are committed to your success. An important part of your employment screening program involves compliance with various laws and regulations, which is why we are providing information regarding screening requirements in certain countries, region, etc. While we are happy to provide you with this information, it is your responsibility to comply with applicable laws and to understand how such information pertains to your employment screening program. The foregoing information is not offered as legal advice but is instead offered for informational purposes. ClearStar is not a law firm and does not offer legal advice and this communication does not form an attorney client relationship. The foregoing information is therefore not intended as a substitute for the legal advice of a lawyer knowledgeable of the user’s individual circumstances or to provide legal advice. ClearStar makes no assurances regarding the accuracy, completeness, or utility of the information contained in this publication. Legislative, regulatory and case law developments regularly impact on general research and this area is evolving rapidly. ClearStar expressly disclaim any warranties or responsibility or damages associated with or arising out of the information provided herein.
