Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

"But the Supreme Court also said that it will hear arguments in the case during its next term, which starts in October, not during the current term as the Biden administration had requested. That means a final decision in the case could be delayed until June 2024.

Sen. Elizabeth Warren, D-Mass., who first proposed the creation of the CFPB, in a statement, said, "Despite years of desperate attacks from Republicans and corporate lobbyists, the constitutionality of the CFPB and its funding structure have been upheld time and time again."

"If the Supreme Court follows more than a century of law and historical precedent, it will strike down the Fifth Circuit's decision before it throws our financial markets and economy into chaos," Warren said.

But a lawyer for the two payday-lending advocacy groups that are the plaintiffs in the case said the court's decision to hear the dispute "reflects the importance of the separation-of-powers issues at stake in this case."

"As we have demonstrated, and the Fifth Circuit Court of Appeals has held, the CFPB's self-funding mechanism lacks any contemporary or historical precedent, improperly shields the agency from congressional oversight and accountability, and unconstitutionally strips Congress of its power of the purse under the Appropriations Clause of the Constitution," said the attorney, Christian Vergonis, of the law firm Jones Day.

Vergonis said that his clients, the Community Financial Services Association of America and Consumer Service Alliance of Texas, "look forward to presenting these arguments to the Supreme Court."

The private government watchdog group Accountable.US, in a statement, called the lawsuit by the payday plaintiffs "baseless," and said it is "the crown jewel in a long-running, highly organized effort by greedy industries and right-wing politicians in their pocket to take out the CFPB because it works so well to protect consumers from abuse."

"It's apt that predatory lenders are leading this latest assault as no industry has a bigger ax to grind against the CFPB after facing numerous fines for mistreating consumers," said Liz Zelnick, Accountable.US's director of economic security and corporate power.

The Supreme Court in a 2020 ruling allowed the CFPB to continue operating but also said that a provision of the law that created the agency was unconstitutional because it violated the separation of powers rule.

That provision had said that the director of the CFPB could be removed from that position "only for cause."

The court, in its 5-4 ruling that year, said that the director must be removable by the will of the president, for any reason.

Since its creation in 2010, the CFPB has recovered more than $15 billion for customers."

https://www.google.com/amp/s/www.cnbc.com/amp/2023/02/27/supreme-court-will-hear-case-challenging-consumer-financial-protection-bureau-funding.html

"But the Fifth Circuit's ruling opened the door for the bureau's 12-year history of rules and enforcement actions to be challenged.

While the high court considers the case, the CFPB faces challenges to its regulatory and enforcement actions. The case is the second constitutional challenge to the CFPB in five years."

"Many experts think any Supreme Court decision will lead to a fight in Congress over the CFPB's future funding. Though some banks and financial institutions want the CFPB to be abolished outright, many others are hoping for a ruling that would force Democratic lawmakers to bow to reforms, including funding the agency through congressional appropriations and adopting a five-member commission structure instead of a single director with full authority.

Republicans intend to bring "the unaccountable CFPB under the annual appropriations process," House Financial Services Committee Chairman Patrick McHenry, R-N.C., said in a news release Monday. "As Republicans have said for years, the CFPB's unconstitutional funding structure improperly insulates it from Americans' representatives in Congress."

Many agencies including the U.S. Postal Service and U.S. Mint are funded from sources other than annual appropriations. Federal banking regulators — including the Office of Comptroller of the Currency and Federal Deposit Insurance Corp. — are funded through fees or assessments imposed on financial firms, while the Fed is funded through its own open market operations. When Dodd-Frank was being written, financial firms objected to the CFPB being funded through fees or assessments, experts said.

The case plays to many of the concerns of the current Supreme Court and a decadeslong push backed by many industries to undercut the powers of federal agencies. Much of American administrative law has rested upon a legal principle known as "Chevron deference," a doctrine borne of a 1984 U.S. Supreme Court case that granted federal agencies a wide berth in interpreting ambiguous congressional statutes. "

https://www.americanbanker.com/news/supreme-court-agrees-to-take-cfpb-constitutionality-case