Supreme Court Seems Leery Of Challenge To CFPB’s Constitutionality

The Supreme Court heard oral arguments on Tuesday in a case threatening to unwind the work of the 13-year-old Consumer Financial Protection Bureau by arguing that its funding source is unconstitutional.

The CFPB receives funding from the Federal Reserve Board. The director of the CFPB requests the amount of money it deems reasonably necessary to carry out operations and is capped at 12% of the Fed’s operating expenses reported in 2009 which comes out to roughly $600 million. The percentage cap is adjusted annually for inflation. The payday lenders bringing the case contend the bureau’s funding structure violates the Appropriations Clause of the Constitution, which states that “no money shall be drawn from the Treasury, but in consequence of appropriations made by law.”