Can the Supreme Court Distinguish the CFPB's Funding from Other Agencies'?

Source: American Banker

The latest constitutional challenge to the Consumer Financial Protection Bureau hinges on whether the agency's funding through the Federal Reserve System differs dramatically from the funding of other government agencies, experts say.

The CFPB asked the U.S. Supreme Court last month to overturn an appellate court decision that found agency's funding violates the Constitution's separation of powers. The CFPB has been thrown into legal and political turmoil since October, when a three-judge panel of the U.S. Court of Appeals for the 5th Circuit found the bureau to be unconstitutional.

Some experts think the CFPB's funding through the Federal Reserve — and not directly through annual congressional appropriations — could be the chink in the armor of the Dodd-Frank Act that created the CFPB in 2010. The Supreme Court is widely expected to take the case because several justices, notably Justice Brett Kavanaugh, have voiced strong opposition to the CFPB and to the deference courts give to regulatory agencies. (American Banker)