Consumer Reports urges the Supreme Court to reject the payday loan industry’s challenge of the CFPB’s funding
WASHINGTON, D.C. — The Solicitor General filed a brief with the U.S. Supreme Court on Monday in Consumer Financial Protection Bureau v. Community Financial Services Association of America defending the constitutionality of the CFPB’s funding through the Federal Reserve Board. In a statement released today, Consumer Reports voiced its support for the independent funding of the Consumer Financial Protection Bureau, which is being challenged by the payday loan industry.
“The CFPB has returned billions of dollars to consumers who were ripped off by predatory lenders and treated unfairly by banks and other financial firms,” said Jennifer Chien, senior policy counsel for Consumer Reports. “The Court should reject this radical attempt by payday lenders to undermine the CFPB so that it can continue working to ensure the financial marketplace is safe and fair for all consumers.”
Since its founding in 2010, the CFPB has obtained over $16 billion in relief for 192 million U.S. consumers cheated by financial firms. Congress created the CFPB with independent funding through the Federal Reserve in order to shield it from the political pressure wielded by the powerful financial industry. In addition to the CFPB, the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation all receive their funding independent from the annual congressional appropriations process.
In its brief before the Court, the Solicitor General noted that the 5th Circuit Court of Appeals, which ruled that the CFPB’s funding structure is unconstitutional, stands alone as the only court to have done so. The Solicitor General urged the Court to follow the precedent set by the 2nd Circuit Court of Appeals, the D.C. Circuit Court of Appeals and six district courts that have all upheld the CFPB’s funding as constitutional.
“Every other court that has looked at this issue has upheld the constitutionality of the CFPB’s funding,” said Chien. “Financial industry efforts to undermine the CFPB are particularly concerning given recent bank failures that have underscored the need for robust oversight. We need a strong and independent CFPB with the resources necessary to rein in abusive financial practices without political interference from payday lenders and other powerful special interests.”
Michael McCauley, email@example.com, 415-902-9537