Supreme Court Upholds Cfpb Funding, Saving Agency

The Consumer Financial Protection Bureau’s funding stream, which bypasses the congressional appropriations process, is constitutional, the Supreme Court ruled Thursday, saving the controversial agency from a potentially devastating blow.

The high court, in a 7-2 decision, rejected an argument by payday lenders that Congress’s decision more than a decade ago to insulate the CFPB from the annual budget debate ran afoul of the Constitution’s clause concerning appropriations of federal money. The closely watched case had threatened to not only curtail the power of the bureau but also to disrupt financial markets by casting doubt on the functions of other independently funded regulators across the government.

“In addition to vesting the Bureau with sweeping authority, Congress shielded the Bureau from the influence of the political branches,” Justice Clarence Thomas wrote in an opinion for the court.

“Under the Appropriations Clause, an appropriation is simply a law that authorizes expenditures from a specified source of public money for designated purposes,” the opinion states. “The statute that provides the Bureau’s funding meets these requirements.”