In a twist reminiscent of a courtroom thriller, the U.S. Supreme Court on Tuesday took center stage, hinting at its reservations about deeming the Consumer Financial Protection Bureau’s (CFPB) funding mechanism unconstitutional. The case, catalyzed by two payday lender trade groups, delves deep into the core of America’s separation of powers.
Supreme Court CFPB Ruling : Unique Funding Mechanism Under Scrutiny
At the heart of this nail-biting legal drama is the Dodd-Frank Act. This pivotal legislation allows the CFPB to tap into the Federal Reserve for its budget, rather than the traditional congressional approval. This funding setup, described by the trade group’s counsel as “historically unprecedented”, is under fire for potentially threatening the sacred constitutional balance of power.
Jones Day partner Noel Francisco, in a move reminiscent of a climactic courtroom scene, argued that Congress had ventured too far into uncharted waters. Francisco passionately argued that the CFPB’s broad spending autonomy was tantamount to granting the executive branch unchecked spending power, blurring the line between the branches of government.
Justices Weigh In with Perplexity
Yet, as in any gripping tale, there are twists and turns. Justice Brett Kavanaugh confronted Francisco’s claim, questioning the description of the CFPB’s funding as “perpetual”. He argued that Congress could overturn this mechanism at any moment, rendering the term “perpetual” misleading. Additionally, Kavanaugh voiced concerns over labeling the CFPB as the zenith of independent agencies, pointing to past Supreme Court actions which have clipped the CFPB’s wings.
