Supreme Court Upholds Funding Structure for CFPB
Landmark Decision Affirms Independence of Consumer Protection Agency
WASHINGTON, May 16, 2024 (AP) — The Supreme Court on Thursday upheld the funding structure for the Consumer Financial Protection Bureau (CFPB), rejecting a challenge that sought to limit the agency's independence. The unanimous decision is a major victory for the CFPB, which has been under fire from Republicans who have argued that its structure is unconstitutional.
The CFPB was established under a law signed by Democratic former President Barack Obama in 2010. The agency is funded through the Federal Reserve, which is an independent entity not subject to congressional appropriations. This funding structure was designed to protect the CFPB from political interference.
In 2020, the conservative US Court of Appeals for the 5th Circuit ruled that the CFPB's funding structure violated the Constitution. The court said that the structure gave the CFPB too much power and that it was not accountable to Congress. The Trump administration supported the court's decision, while the Biden administration appealed it to the Supreme Court.
In its opinion, the Supreme Court rejected the 5th Circuit's reasoning. The Court held that the CFPB's funding structure is constitutional and that the agency is accountable to Congress through its oversight authority. The Court also noted that the CFPB has played a vital role in protecting consumers from financial harm.
The Supreme Court's decision is a major victory for consumer protection. The CFPB has been a strong advocate for consumers, and its funding structure has protected it from political interference. The Court's decision ensures that the CFPB will be able to continue its important work.
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