The US Consumer Financial Protection Bureau headquarters in Washington, DC, US, on Tuesday, Oct. 3, 2023. Thirteen years after a Democratic-controlled Congress created the CFPB to regulate mortgages and other consumer-finance products, the Supreme Court will weigh a novel constitutional argument that the bureau's supporters say could leave it decimated.
The case involves the arcane topic of how the banking consumer agency pays its bills. When it was established, Congress protected the agency against a boom-and-bust cycle of funding and made sure that banking lobbyists could not hold its appropriation hostage each year. Legislators passed a law that had the agency be independently funded through the Federal Reserve System rather than through annual congressional appropriations.
The immediate impact would be felt at the consumer agency itself. A bad ruling could nullify every action it has taken to date in the most extreme scenario, or it could effectively freeze the CFPB’s ability to function until Congress passes new legislation. It could also endanger other agencies with funding arrangements that fall outside the annual congressional appropriations process—including the Federal Deposit Insurance Corporation, the Federal Reserve itself, the U.S.