After being challenged by the payday loan industry, the Consumer Financial Protection Bureau’s funding mechanism was declared constitutional by the Supreme Court in a 7-2 ruling.
In a reversal of a lower court’s ruling, the decision—written by conservative Justice Clarence Thomas—affirmed that the bureau’s funding design did not violate the “appropriations clause” in the U.S. Constitution that gives Congress the authority to give funding. Rather than being funded by budgets passed by legislators, the CFPB gets its money from the Federal Reserve.
The ruling is a victory for President Joe Biden’s fight to eliminate so-called “junk fees,” and he promoted how the bureau has provided nearly $9 billion in consumer relief during his presidency.
The three liberal members of the court, along with four of the six conservative justices, supported the ruling. Conservative Justices Samuel Alito and Neil Gorsuch dissented, writing that the decision “turns the Appropriations Clause into a minor vestige.”
