Signage at the Consumer Financial Protection Bureau (CFPB) headquarters in Washington, DC
Andrew Kelly | Reuters
WASHINGTON — More than 140 current and former Democratic lawmakers filed an amicus brief in the Supreme Court on Monday to defend the nation’s top consumer protection agency from challenges by its regulator.
The brief, led by Democrats Sen. Sherrod Brown of Ohio and Rep. Maxine Waters of California, relates to the Consumer Financial Protection Bureau v. Community Financial Services Association of America case, which challenges the agency’s constitutionality and would undermine its funding and the authorized authorities.
Brown chairs the Senate Banking Committee, while Waters is the senior member of the House Financial Services Committee.
Upholding an appeals court decision that undermines the agency’s funding mechanism “would jeopardize a funding model that has been used since the Republic’s early days and now applies to the agency.” [Office of the Comptroller of the Currency] and a host of other important federal programs,” lawmakers wrote.
The 144 include current and former Democratic House Minority Leaders Rep. Hakeem Jeffries and Senate Majority Leader Chuck Schumer, both from New York, along with Senate Majority Leader Dick Durbin, D-Illinois, and Speaker Emeritus Nancy Pelosi, D-California Members of Congress who signed the order.
Ten consumer protection organizations also filed an amicus brief with the Supreme Court this month in support of the CFPB.
The Supreme Court agreed to hear the arguments in the case in February, four months after a federal appeals court unanimously ruled that the CFPB’s funding method was unconstitutional.
Congress decided to fund the CFPB, created by the 2010 Dodd-Frank Act in the wake of the 2008 financial crisis, from the Federal Reserve to “ensure independence from unpredictable annual funding cycles,” the letter said.
Though the CFPB bypasses the annual appropriation process, its director must justify its budget to the House of Representatives every two years, lawmakers wrote, and Congress put an annual cap on the agency’s budget at a “modest” level using a portion of the revenue Federal Reserve firm.
In the October ruling, Justice Cory Wilson, a member of the three-judge panel on the Fifth Circuit Court of Appeals, called the funding mechanism a “system” “unique to the myriad independent executive agencies of the federal government.”
The Biden administration appealed the 5th Circuit’s decision to the Supreme Court, but a final decision could be delayed until June 2024 to hear further arguments in the case. In the brief, lawmakers narrowly concluded that “the judgment should be overturned.”