Fannie Mae (FNMA)

[Robert from yahoo bd]

"What does the 5th Circuit’s decision mean for the agency’s actions to date in general? The other part of that question, too, is what’s it mean for the agency’s actions going forward?” Hulse said. “It seems likely that the Supreme Court would find a potential remedy being that the agency should be subject to appropriations. It does leave open the question, however, what it means for the agency’s actions the last 10 or so years.”

The chamber advocates subjecting the CFPB to the appropriations process. CFPB supporters warn doing so would undermine its independence.

Most federal banking regulators are funded by fees on the businesses they regulate, sitting outside the appropriations process, including the Fed, Federal Deposit Insurance Corporation and others. Some financial regulators, including the Securities and Exchange Commission, are funded through appropriations, although the money is provided to the SEC by industry fees, not taxpayer dollars.

The CFPB is unusual in that it draws its funding from another agency, the Fed, rather than through appropriations or fees.

Peterson said the 5th Circuit’s vacating of a rule because the funding is unconstitutional could call into question the legitimacy of all of the CFPB’s rules."

https://rollcall.com/2022/10/28/appellate-ruling-may-force-another-supreme-court-look-at-cfpb/

"Other Federal Regulators Are in the Crosshairs. We could see similar constitutional challenges to other federal financial regulators such as the OCC. In its opinion, the court noted that several other federal financial regulators are also self-funded and exempt from appropriations. The Federal Reserve, the FDIC, the OCC, the National Credit Union Administration and the Federal Housing Finance Agency all have “uncapped budgetary autonomy,” so they too could face separation-of-powers challenges. On the other hand, the Fifth Circuit attempted to draw a distinction with the Bureau, stating that none of these agencies wield enforcement or regulatory authority in the same expansive and impactful manner as the CFPB. Whether that distinction will prove persuasive remains to be seen, as agencies like the OCC and Federal Reserve also have an outsized regulatory impact on the U.S. economy. However, the CFPB’s unitary leadership structure, directly answerable to the President, may provide a basis for distinguishing these agencies and their funding mechanisms."

https://www.manatt.com/insights/newsletters/financial-services-law/lights-out-fifth-circuit-finds-cfpbs-funding-mech