Supreme Court justices sound skeptical of challenge to Consumer Financial Protection Bureau

 October 4, 2023

Conservatives have long been suspicious of the Consumer Financial Protection Bureau, an entity that was created by the Dodd-Frank Act of 2010 to regulate mortgages, car loans, and other aspects of consumer finance.

In a move that came as a shock to some of them, the Supreme Court appears willing to let it continue operating. 

Some conservative justices seem unconvinced by challenge

According to the Associated Press, justices heard oral arguments on Tuesday in a case over whether the Consumer Financial Protection Bureau's funding formula is unconstitutional.

Unlike other agencies of the federal government, the bureau is funded by the Federal Reserve rather than having to rely on Congress.

The Associated Press noted how a federal appeals court in New Orleans took issue with this arrangement, concluding that it violates the Constitution's appropriations clause.

However, the news services pointed out that even some of the Supreme Court's conservative members sounded skeptical about this line of reasoning.

"Congress could change it tomorrow. There’s nothing permanent or perpetual about this," Justice Brett Kavanaugh was quoted as saying. However, fellow Republican appointee Samuel Alito was said to be "aggressive" in his questioning of lawyers defending how the bureau is funded.

Supreme Court previously ruled that bureau head can be fired "at will"

This is not the only case concerning the Consumer Financial Protection Bureau that America's highest judicial body has heard in recent years.

The Associated Press reported in 2020 that five conservative justices voted to strike down restrictions Congress had imposed on the president's ability to fire the bureau's director.

"The agency may ... continue to operate, but its Director, in light of our decision, must be removable by the President at will," Chief Justice John Roberts wrote.

"We hold that the CFPB’s leadership by a single individual removable only for inefficiency, neglect, or malfeasance violates the separation of powers," the chief justice went on to add.

Liberal justice claims majority opinion is simplistic

Yet liberal Justice Elena Kagan took issue with that conclusion, writing, "What does the Constitution say about the separation of powers — and particularly about the President’s removal authority? (Spoiler alert: about the latter, nothing at all.)"

"The majority offers the civics class version of separation of powers — call it the Schoolhouse Rock definition of the phrase," she said, referencing the educational, animated short films," Kagan continued.

"Today’s decision wipes out a feature of that agency its creators thought fundamental to its mission— a measure of independence from political pressure. I respectfully dissent," the justice complained.

" A free people [claim] their rights, as derived from the laws of nature."
Thomas Jefferson
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