On Monday, July 13, 2023, America’s Future filed an Amicus brief with the Supreme Court of the United States (SCOTUS) in Consumer Financial Protection Bureau, et al. v Community Financial Services Association of America, Limited, et al., SCOTUS Dkt. No. 22-448. The case focuses on the emboldened regulatory and administrative agencies running afoul of America’s prized Separation of Powers principles. Two other nonprofit organizations joined the brief. The public docket for this case is located here.
The SCOTUS is tasked to resolve whether the creation of the Consumer Financial Protection Bureau (CFPB) and/or its funding mechanism violates the Appropriations Clause of the U.S. Constitution, thereby contravening our nation’s Separation of Powers doctrine.
The issue in this case is of great import to our nation because it centers on America’s fundamental notion that ultimate power is vested in the people through Separation of Powers, a system of checks and balances.
This case springs out of the creation and structure of the CFPB, a regulatory agency created by Congress in response to the 2007-2008 financial and housing crisis. When Congress enacted the Consumer Financial Protection Act, the CFPB was created as an independent regulatory agency housed within the Federal Reserve, funded directly by the Federal Reserve instead of Congress, and administered outside the purview of elected representatives. Minimal, if any, controls were placed on the CFPB from the start.
The CFPB, as explained in our brief, was vested by Congress with “executive, legislative, and quasi-judicial powers.” Congress’ proclivity of granting federal agencies with nearly limitless regulatory powers is not unusual, however, as we explain, “the CFPB is unique because its funding mechanism is not controlled by Congress. It is not funded with periodic congressional appropriations. Instead, the Bureau receives funding directly from the Federal Reserve.” And therein lies the problem. There is an utter and intolerable lack of transparency and oversight when it comes to the CFBP and the regulations they create, implement, enforce, and adjudicate.
This case presents the SCOTUS with an opportunity to stave off further federal government overreach by affirming the October 19, 2022 judgment of the Fifth Circuit Court of Appeals, which ruled against the CFPB. Writing for the majority in the Fifth Circuit panel decision, the Hon Cory T. Wilson explained,
Congress’s decision to abdicate its appropriations power under the Constitution, i.e., to cede its power of the purse to the Bureau, violates the Constitution’s structural separation of powers.
The Appropriations Clause of the Constitution is where the rubber meets the road when it comes to Congressional oversight of the executive branch. As a reminder, when the Republicans gained control of the House of Representatives following the 2022 midterm elections, much of the national conversation focused on a renewed effort to rein in the federal government through the House’s authority to control the purse strings and, therefore, manage the disposition of taxpayer funds. Congressional power to determine how taxpayer money is spent by the federal government is one of the most powerful tools America has to fight tyranny.
The Appropriations Clause of the Constitution is found in Article I, Section 9. It is the primary source of authority when it comes to funding or defunding administrative agencies, blocking implementation of bureaucratic red tape, and staving off corrupt executive branch overreach. The CFPB, as it stands, answers to no one and receives funding without proper controls in place. The taxpayers of this country deserve far greater protection from government overreach. America’s Future urges the SCOTUS to affirm the Fifth Circuit Court of Appeals judgment.