WASHINGTON – A coalition of consumer groups has filed an amicus brief with the Supreme Court in support of the CFPB’s funding structure, stating the Fifth Circuit's “radical and unprecedented decision” in the case of CFPB vs. CFSA, if upheld, would “undermine the critical work of the Consumer Financial Protection Bureau (CFPB) in protecting consumers and enforcing regulations against deceptive practices by Wall Street and predatory lenders.”
“Responsible banks and financial players, like consumers, benefit from the CFPB’s work to level the playing field, and that work is jeopardized by the Fifth Circuit's unprecedented decision to destabilize the CFPB's funding," said Lauren Saunders, associate director of the National Consumer Law Center, in a statement.
‘Incorrect’ Characterization
The NCLC said the court of appeals’ decision “incorrectly characterizes” the CFPB's funding statute as a violation of the Appropriation Clause, disregarding the fact that the statute fully aligns with the clear command of this passage.
It requires federal expenditures to be authorized by law, as this amicus brief explains and the 2nd Circuit recently affirmed, the organization stated.
“Upholding the Fifth Circuit's decision on the CFPB would be catastrophic," said Elyse Hicks, consumer policy counsel at Americans for Financial Reform. "The Supreme Court should preserve the integrity of the Constitution and rectify this misguided decision as soon as possible and recognize the vital role of the CFPB in protecting consumers.”
‘Never Before’ Precedent
Added Scott Nelson, attorney at Public Citizen Litigation Group and principal author of the brief, “Never before has any court held that a law passed by Congress to fund a federal agency is not a proper ‘appropriation’ under the Constitution. The Appropriations Clause challenge to the CFPB is a made-up theory aimed only at destroying an agency whose job is to serve consumers instead of monied interests.”
Americans for Financial Reform, Public Citizen, Consumer Federation of America, National Consumer Law Center, US PIRG, National Association of Consumer Advocates, Consumer Action, Consumer Reports, Student Borrower Protection Center and the Electronic Privacy Information Center joined the brief.
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