The Supreme Court upheld the existence of the Consumer Financial Protection Bureau in a Thursday ruling.
The CFPB’s funding structure had been attacked in court by conservative groups led by a payday loan organization, but the court issued a 7-2 decision in favor of the CFPB’s constitutionality.
Justice Clarence Thomas, one of the court’s most conservative justices, authored the majority opinion.
“The associations make three principal arguments for why the Bureau’s funding mechanism violates the Appropriations Clause,” Thomas wrote. “None is persuasive.”
The CFPB was created in the wake of the 2008 financial crisis, which was triggered by irresponsible actions in the American banking industry. It has been a target of conservative anger for its entire existence.
Last year, payday lenders argued in the court that the CFPB’s funding structure violated the Constitution because it’s not part of the Congressional budget process each year. Instead, it receives a set amount of money from the Federal Reserve.
But Thomas, who prides himself on his strict interpretation of the Constitution, referenced the nation’s early days to defend the CFPB.
“The Bureau’s funding mechanism fits comfortably with the First Congress’ appropriations practice,” he wrote. “We therefore hold that the requirements of the Appropriations Clause are satisfied.”
Justices Elena Kagan and Ketanji Brown Jackson, both liberals, wrote concurring opinions, while conservatives Samuel Alito and Neil Gorsuch dissented.
“The Court upholds a novel statutory scheme under which the powerful Consumer Financial Protection Bureau (CFPB) may bankroll its own agenda without any congressional control or oversight,” Alito argued.
The Supreme Court has heard arguments about the CFPB in the past. In 2020, it ruled the regulator’s director had been improperly insulated against removal and decided the president should have the power to remove the director at will.
