Washington, D.C. – The impending oral arguments before the Supreme Court in the CFPB v. CFSA on Tuesday, October 3, will implicate not only a narrow pay-day rule but potentially years of CFPB enforcement work. Today, Americans for Financial Reform Education Fund (AFREF) and the Constitutional Accountability Center (CAC) are sharing evidence of the wide range of CFPB rules and enforcement actions that could be affected by the Supreme Court’s decision. 

CFPB v CFSA rests on a radical, unprecedented interpretation of the Appropriations Clause that no court outside the Fifth Circuit has embraced, and a decision affirming the Fifth Circuit could have an impact not only on the payday lending rule at issue in the case, but also on all of the CFPB’s rules and enforcement actions. The consequences for America’s consumers and financial and housing markets could be disastrous.

The evidence: The courts have already suspended a host of CFPB enforcement actions while the funding issue is pending before the Supreme Court. If the Fifth Circuit ruling is upheld, there will be tremendous market uncertainty as to whether these or any other CFPB rules and actions are valid.

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“A Supreme Court decision affirming the Fifth Circuit’s decision on the constitutionality of the CFPB’s funding structure could permanently hamper the CFPB’s ability to do the important work that Congress empowered it to do when it created the agency in response to the 2008 mortgage crisis and Great Recession,” said Elyse Hicks, consumer policy counsel at Americans for Financial Reform Education Fund. “The courts halting CFPB enforcement while they await the outcome of CFPB v CFSA is a preview of the damaging domino effect on rules that govern our mortgage market and more, that will result from a bad SCOTUS ruling.”

“As we explained in a brief we filed on behalf of scholars of history and constitutional law, the payday lenders’ attacks on the CFPB are completely at odds with the text and history of the Constitution. Under the Constitution, it is the role of Congress, not the courts, to determine how federal agencies are funded, and Congress made the considered decision that the CFPB, like many other federal financial regulators, could do its work on behalf of the American public most effectively with a stable funding source,” said Brianne Gorod, chief counsel at Constitutional Accountability Center. “A decision disregarding Congress’s choice and affirming the Fifth Circuit’s decision could have disastrous consequences, threatening all of the CFPB’s important work protecting consumers and imperiling the stability of the financial markets. These cases show how much is at stake at the Supreme Court.”