We the People

Is the Consumer Financial Protection Bureau Unconstitutional?

Oct 6, 2023

Supreme Court heard arguments on the constitutionality of the Consumer Financial Protection Bureau's funding structure, potential effects on the administrative state, economy, and markets. Constitutional law scholars analyze the case, central questions, and funding comparisons. Influence of court on appropriations bills discussed, as well as the role of customs service. Arguments about historical analogues, accountability, and governing principle in deciding future cases.

45:33

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Quick takeaways

The Supreme Court is considering whether the funding structure of the Consumer Financial Protection Bureau (CFPB) is unconstitutional under the Appropriations Clause, which could have significant implications for the future of the CFPB and the administrative state.

The debate revolves around the definition of an 'appropriation' and whether the CFPB's funding structure, which allows the director to determine the amount reasonably necessary, meets the constitutional requirements, raising concerns about the constitutionality of other federal agencies.

Deep dives

The Funding Structure of the CFPB

The Fifth Circuit struck down the funding structure of the Consumer Financial Protection Bureau (CFPB) under the Appropriations Clause of the Constitution. The court determined that the CFPB's funding, which came from the Federal Reserve Fund, did not comply with the Constitution's restrictions on appropriations. The concern raised by the Fifth Circuit was that the CFPB's funding structure allowed for an indefinite authorization by the CFP Director to determine the amount of funding reasonably necessary. The Supreme Court justices in the oral arguments explored the extent of Congress' role in determining appropriations and the meaning of the term 'appropriation'.

Introduction

2min

The Challenge to the Funding Structure of the CFPB

15min

Court's Influence over Appropriations Bills and the Role of the Custom Service

5min

The Constitutional Value and Limitations of the CFPB's Funding

18min

Historical Analogues and the Constitutionality of the CFPB

5min

On Tuesday, October 3, the Supreme Court heard oral arguments in Consumer Financial Protection Bureau v. Community Financial Services Association of America. Industry groups representing payday lenders brought a challenge arguing that the CFPB funding structure is unconstitutional under the Appropriations Clause. The outcome of the case could have big effects not just on the future of the CFPB itself, but on the economy, markets, and the future of the administrative state. In this episode, two leading constitutional law scholars and Supreme Court experts—Brianne Gorod of the Constitutional Accountability Center, and Professor Jennifer Mascott of the Antonin Scalia Law School— join Center President and CEO Jeffrey Rosen to recap the oral arguments in the CFPB case, what questions or issues the justices were the most focused on, and predict how the Court might rule.

Resources:

CFPB v. CFSAA (oral argument transcript)
Brianne Gorod/Constitutional Accountability Center, Amicus Brief in support of petitioners
Jennifer Mascott/Separation of Power Clinic, Gray Center for the Study of the Administrative State, Amicus Brief of 132 members of Congress in support of respondents
Seila Law v. CFPB (2020)
Appropriations Clause, Interactive Constitution

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We the People

Is the Consumer Financial Protection Bureau Unconstitutional?

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

The Funding Structure of the CFPB

Requirements for an Appropriation

Defining an Appropriation

Implications and Challenges

Remember Everything You Learn from Podcasts