Current:Home > NewsSupreme Court to hear case that threatens existence of consumer protection agency-LoTradeCoin
Supreme Court to hear case that threatens existence of consumer protection agency
View Date:2025-01-11 07:30:16
The Supreme Court agreed on Monday to take up a case that could threaten the existence of the Consumer Financial Protection Bureau and potentially the status of numerous other federal agencies, including the Federal Reserve.
A panel of three Trump appointees on the Fifth Circuit Court of Appeals ruled last fall that the agency's funding is unconstitutional because the CFPB gets its money from the Federal Reserve, which in turn is funded by bank fees.
Although the agency reports regularly to Congress and is routinely audited, the Fifth Circuit ruled that is not enough. The CFPB's money has to be appropriated annually by Congress or the agency, or else everything it does is unconstitutional, the lower courts said.
The CFPB is not the only agency funded this way. The Federal Reserve itself is funded not by Congress but by banking fees. The U.S. Postal Service, the U.S. Mint, and the Federal Deposit Insurance Corp., which protects bank depositors, and more, are also not funded by annual congressional appropriations.
In its brief to the Supreme Court, the Biden administration noted that even programs like Social Security and Medicare are paid for by mandatory spending, not annual appropriations.
"This marks the first time in our nation's history that any court has held that Congress violated the Appropriations Clause by enacting a law authorizing spending," wrote the Biden administration's Solicitor General Elizabeth Prelogar.
A conservative bête noire
Conservatives who have long opposed the modern administrative state have previously challenged laws that declared heads of agencies can only be fired for cause. In recent years, the Supreme Court has agreed and struck down many of those provisions. The court has held that administrative agencies are essentially creatures of the Executive Branch, so the president has to be able to fire at-will and not just for cause.
But while those decisions did change the who, in terms of who runs these agencies, they did not take away the agencies' powers. Now comes a lower court decision that essentially invalidates the whole mission of the CFPB.
The CFPB has been something of a bête noire for some conservatives. It was established by Congress in 2010 after the financial crash; its purpose was to protect consumers from what were seen as predatory practices by financial institutions. The particular rule in this case involves some of the practices of payday lenders.
The CFPB was the brainchild of then White House aide, and now U.S. Senator Elizabeth Warren. She issued a statement Monday noting that lower courts have previously and repeatedly upheld the constitutionality of the CFPB.
"If the Supreme Court follows more than a century of law and historical precedent," she said, "it will strike down the Fifth Circuit's decision before it throws our financial market and economy into chaos."
The high court will not hear arguments in the case until next term, so a decision is unlikely until 2024.
veryGood! (679)
Related
- 'Underbanked' households more likely to own crypto, FDIC report says
- Yemen's Houthi rebels detain at least 9 U.N. staffers, officials tell AP
- Northern lights forecast: Why skywatchers should stay on alert for another week
- Who Does Luke Bryan Want to Replace Katy Perry on American Idol? Here's the Truth
- Todd Golden to continue as Florida basketball coach despite sexual harassment probe
- Who Does Luke Bryan Want to Replace Katy Perry on American Idol? Here's the Truth
- How many points did Caitlin Clark score today? No. 1 pick scores career-high threes in win
- Ex-NBA player Delonte West arrested on multiple misdemeanor charges in Virginia
- What does the top five look like and other questions facing the College Football Playoff committee
- Optimism is just what the doctor ordered. But what if I’m already too negative?
Ranking
- Conviction and 7-year sentence for Alex Murdaugh’s banker overturned in appeal of juror’s dismissal
- New York moves to ban ‘addictive’ social media feeds for kids
- GameStop stock plunges after it reports quarterly financial loss
- Ford recalls more than 8,000 Mustangs for increased fire risk due to leaking clutch fluid
- 'Cowboy Carter' collaborators to be first country artists to perform at Rolling Loud
- Inside RuPaul and Husband Georges LeBar's Famously Private Love Story
- VP Harris campaigns to stop gun violence with Maryland Senate candidate Alsobrooks
- Ariana Grande's The Boy Is Mine Video Features Cameos From Brandy, Monica and More
Recommendation
-
Mike Tyson vs. Jake Paul stirs debate: Is this a legitimate fight?
-
California man arrested after police say he shot at random cars, killing father of 4
-
Ex-NBA player Delonte West arrested on multiple misdemeanor charges in Virginia
-
2024 cicada map: Where to find Brood XIII, Brood XIX around the Midwest and Southeast
-
Olivia Munn Says She “Barely Knew” John Mulaney When She Got Pregnant With Their Son
-
Prince William’s Special Role at The Duke and Duchess of Westminster's Royal Wedding Revealed
-
Florida woman charged with leaving her boyfriend to die in a suitcase faces October trial
-
Lana Del Rey Shares Conversation She's Had With Taylor Swift So Many Times