"The funds statutorily available to the CFPB cannot
exceed twelve percent of the Federal Reserve’s operat-
ing expenses, as reported in 2009 and adjusted for infla-
tion—an amount that presently exceeds $700 million.
12 U.S.C. § 5497(a)(2)(A)(iii); see Pet. App. 34a n.12. Up
to that statutory limit, the Federal Reserve is author-
ized to transfer to the Bureau Fund “the amount
determined by the [CFPB] Director to be reasonably
necessary to carry out the authorities of the Bureau
under Federal consumer financial law,” after account-
ing for the prior year’s funding. 12 U.S.C. § 5497(a)(1)."
SUMMARY OF ARGUMENT
"This amicus brief focuses principally on the
extraordinary remedy ordered by the court of appeals
for that purported Appropriations Clause violation—
vacatur of an otherwise lawfully promulgated regula-
tion."
"Indeed, it is altogether speculative that the CFPB might
somehow have behaved differently had its funding been
drawn from the Treasury rather than the Federal
Reserve.
The mismatch between the harms identified by the
court of appeals and the remedial order highlights the
impropriety of the ruling. This case is not one where a
court found that an agency had acted in derogation of
Congress’s direction or in a manner inconsistent with
express funding limitations. To the contrary, the court
of appeals found that the Payday Lending Rule was well
within the scope of the CFPB’s delegated authority.
Vacatur of the rule was not needed to respect the separa-
tion of powers between Congress and the Executive: the
executive agency was acting entirely as Congress
commanded. It was the court of appeals that stepped in
to create a conflict between the branches that did not
otherwise exist."
"Here, the court of appeals not only vacated the
Payday Lending Rule but did so based on reasoning
that could require vacatur of numerous other CFPB
regulations that set robust, nationwide protections for
consumers, provide guidance to financial-services
providers, and complement the States’ regulatory and
enforcement efforts"
II. THE COURT OF APPEALS ERRED IN VACATING
THE CHALLENGED REGULATION.
"This Court has repeatedly rejected the argument
that a challenged agency action “must be completely undone,” just because the agency operated with a consti-
tutional defect at the time of its action. Collins v. Yellen,
141 S. Ct. 1761, 1788 (2021); see, e.g., Seila Law, 140 S.
Ct. at 2208 (refusing to invalidate a civil investigative
demand issued by a prior CFPB Director with unconsti-
tutional removal protection). That holding applies even
when the Court holds that a statutory scheme “violates
the separation of powers” (as the court of appeals held
here, see Pet. App. 28a–42a). See Collins, 141 S. Ct. at
1783. Rather, a challenger is entitled to only as much
relief as would be “sufficient” to correct the specific
constitutional defect, based on traditional remedial
principles. Free Enter. Fund v. Public Co. Accounting
Oversight Bd., 561 U.S. 477, 513 (2010); see Madsen v.
Women’s Health Ctr., Inc., 512 U.S. 753, 765 (1994)
(requiring relief that is “no broader than necessary to
achieve its desired goals”).
"In
other words, the hypothetical difference between the
CFPB’s funding coming from the Federal Reserve or
from the Treasury is minute at best, and is by no means
a basis to afford judicial relief against the CFPB’s
regulations or other actions."
"The record suggests just
the opposite, if the CFPB’s history of dealing with other
structural constitutional problems is any guide. Even
after this Court found in Seila Law that the Director
had been operating with unconstitutional removal
protections, which included the period in which the Pay-
day Lending Rule was issued, the Director ratified and
then reissued the relevant provisions of that regulation.
See Payday, Vehicle Title, and Certain High-Cost Installment Loans, 85 Fed. Reg. 41,905 (July 13, 2020);
Payday, Vehicle Title, and Certain High-Cost Install-
ment Loans, 85 Fed. Reg. 44,382 (July 22, 2020). That
is, there is strong evidence that the CFPB would have
issued the same regulation once again, after any consti-
tutional defect was corrected.
The Court
could, as petitioners suggest (Pet. 24), sever the CFP
Act’s provision that precludes the House and Senate
Committees on Appropriations from reviewing the
CFPB’s budget. See 12 U.S.C. § 5497(a)(2)(C). Or the
Court could require the CFPB to request funding from
the Committees going forward, as the CFP Act itself
contemplates when there is a need for additional appro-
priated funds. See id. § 5497(e). Each of those remedies
would be sufficient to ensure the necessary degree of
congressional control.
This Court’s precedents confirm that the CFPB’s
lack of periodic congressional appropriations should not
invalidate the CFPB’s regulatory actions. The Court has
held that, if the federal government takes actions and
incurs obligations that have not been properly funded
through appropriations, the funding “insufficiency does
not . . . cancel its obligations.” Maine Cmty. Health
Options, 140 S. Ct. at 1321 (quotation marks omitted).
This understanding makes sense. Whenever the federal
government has acted—whether through promulgating
regulations, holding adjudications, forming contracts,
or issuing grants—members of the public (including
Amici States) rely on those actions in shaping their
affairs. And “it is not reasonable to expect” those with no familiarity with the appropriations process “to know
how much of [an] appropriation remain[ed] available for
[an agency] at any given time.” Salazar v. Ramah
Navajo Chapter, 567 U.S. 182, 1999 (2012) (quotation
marks omitted). This Court should thus grant certiorari
and confirm that the absence of valid appropriations
“does not make void” a prior unfunded action. See The
Head Money Cases, 112 U.S. 580, 599 (1884)."
