"Wherever the line between a constitutionally and unconstitutionally funded agency may be, this unprecedented arrangement crosses it." "While the great majority of executive agencies rely on annual appropriations for funding, the Bureau does not," the judges wrote. It was that part of its structure that the court said violates the Constitution. To protect it from political influence though, the bureau receives its funding from the Federal Reserve, not Congress. It has returned billions of dollars to consumers who it deemed have been treated unfairly.īusiness Financial Watchdog Expected To Get Its Teeth Back Under Biden The bureau was created by the Obama administration and Congress in the wake of the financial crisis and Great Recession to better protect everyday Americans from getting cheated by banks, student loan and credit card companies and other financial firms. "Three judges, all appointed by President Trump, have decided to take away the funding for that agency that Congress itself had voted for," says Chris Peterson, a law professor at the University of Utah and former enforcement attorney at the CFPB. Circuit Court of Appeals threw out a CFPB regulation governing those high-interest-rate lenders and ruled that the way the bureau is funded, "violates the Constitution's structural separation of powers." In a case brought by a payday lending group, a three-judge panel of the 5th U.S. A seal at the Consumer Financial Protection Bureau (CFPB) headquarters in Washington, D.C., on April 16.Ī federal appeals court has ruled that the funding structure of the nation's most powerful financial watchdog agency, the Consumer Financial Protection Bureau, is unconstitutional.
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