Rule of Law

Release: Supreme Court Right To Take Up CFPB Funding Issue and Should Reverse the Fifth Circuit’s Decision That Is at Odds with Constitutional Text and History

WASHINGTON, DC – On news that the Supreme Court has agreed to hear Community Financial Services Association of America v. Consumer Financial Protection Bureau, the challenge to the constitutionality of the Consumer Financial Protection Bureau’s (CFPB’s) funding structure, CAC Chief Counsel Brianne Gorod said:

The Supreme Court was right today to agree to review the Fifth Circuit’s decision holding the CFPB’s funding structure unconstitutional.  That decision is both profoundly wrong and incredibly dangerous, and the Supreme Court should reverse it.

According to the Fifth Circuit, the CFPB’s funding structure is unconstitutional because the CFPB does not rely on annual appropriations from Congress.  Notably, however, the requirement the Fifth Circuit would impose can be found nowhere in the text of the Constitution, and it is contrary to established practice going back to the beginning of the nation.

CAC Senior Appellate Counsel Brian Frazelle continued:

Congress has long exercised the flexibility the Constitution gives it to fund agencies through means other than appropriations from the Treasury.  For example, as early as the 1790s, Congress authorized the post office to operate using funds from postage fees, rather than withdrawals from the Treasury.  Moreover, the CFPB is hardly unique among modern-day federal agencies in being funded outside the annual appropriations process.

Indeed, that is why the Fifth Circuit’s decision threatens not only the important work that the CFPB does on behalf of America’s consumers, but also could imperil the funding of many other federal agencies, including the Federal Reserve.

The Supreme Court should reverse the Fifth Circuit’s lawless decision and hold, as it has held before, that the Constitution’s Appropriations Clause simply requires that the funding of federal agencies be authorized by Congress, as it plainly was here.



Brianne J. Gorod, Brian R. Frazelle, & Alex Rowell, As Wrong as It is Dangerous: The Fifth Circuit’s Decision Holding the CFPB Funding Structure Unconstitutional:

Brian Frazelle, The Consumer Financial Protection Bureau’s funding is constitutional:


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