Supreme Court Set to Hear Challenge to CFPB Funding Model

The Supreme Court is expected to hear a case this week challenging the funding model of the Consumer Financial Protection Bureau (CFPB).

For Context: The CFPB was created in the aftermath of the 2008 financial crisis. Its stated objective is to ensure Americans “are treated fairly by banks, lenders and other financial institutions.” A group of payday lenders are arguing its funding model makes it overly insulated from congressional oversight.

“Unconstitutional”: The Wall Street Journal Editorial Board (Lean Right bias) argued the design of the CFPB is “unconstitutional” and violates the separation of powers outlined in the constitution. Since its creation, the CFPB has “increasingly expanded its remit and assumed responsibilities of federal agencies whose resources are constrained by Congress.” The Board determines the “current political distemper” to be in part the result of Congress having “increasingly abdicated its powers to the federal bureaucracy,” leaving citizens “vulnerable to regulators insulated from accountability.”

Good Government: A writer in the Washington Post (Lean Left bias) argued that if the CFPB is weakened, “we’ll all be poorer for it.” The writer states that the CFPB has returned “more than $17 billion to Americans separated from their money by financial sector shenanigans” and that “companies have spent over a decade attempting to hobble or dismantle the CFPB.” Citing work done by the CFPB since its formation, the writer determines, “Unless you’re a predatory financial-services company, the government, in this case, is here to help all of us.”