Mon. May 20th, 2024

From today’s NPR News:

n a major Supreme Court case involving the structure of government, a majority of justices seem inclined to uphold the way the Consumer Financial Protection Bureau and many other agencies are funded.

After the 2008 crash, Congress created the CFPB to protect consumers from what were seen as predatory and deceptive practices by financial institutions.

Since then, the Bureau has established consumer protections for financial transactions ranging from mortgages to credit cards. But payday lenders have, for years, fought regulations that would limit excessive fees charged on small loans of just a few hundred dollars — fees that often end up costing people thousands of dollars.

Then last year, the Fifth Circuit Court of Appeals, which covers Texas and some southern states, ruled the CFPB’s structure is unconstitutional. The appeals court said the Bureau’s funding mechanism violates the appropriations clause of the Constitution because instead of an annual congressional appropriation, Congress set the agency’s funding at an annual capped amount that comes from banking fees paid to the Federal Reserve system.

The government appealed to the Supreme Court because many other agencies are similarly funded, including the Federal Reserve itself; the Federal Deposit Insurance Corp., which insures bank deposits; the Office of the Comptroller of the Currency, which charters and regulates all national banks; and potentially even Social Security and Medicare, which are funded by a specific tax.

Read the complete story here.

By Editor