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More than 140 Democrats defend CFPB in case before Supreme Court that threatens agency’s existence

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Signage at the Consumer Financial Protection Bureau (CFPB) headquarters in Washington, D.C.

Andrew Kelly | Reuters

WASHINGTON — More than 140 current and former Democratic lawmakers filed an amicus brief in the Supreme Court on Monday to defend the country’s leading consumer protection agency from challenges to its regulatory authority.

The brief — led by Democrats Sen. Sherrod Brown, of Ohio, and Rep. Maxine Waters, of California — relates to the case Consumer Financial Protection Bureau v. Community Financial Services Association of America, which challenges the constitutionality of the agency and would undermine its funding and mandated authorities.

Brown chairs the Senate Banking Committee, while Waters is the ranking member of the House Financial Services Committee.

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Upholding an appeals court decision that undermined the agency’s funding mechanism “would place at risk a funding model that has been used since the early Republic, which now applies to the [Office of the Comptroller of the Currency] and a host of other crucial federal programs,” the lawmakers wrote.

Democratic House Minority Leader Rep. Hakeem Jeffries and Senate Majority Leader Chuck Schumer, both of New York, along with Senate Majority Whip Dick Durbin, D-Ill., and Speaker Emerita Nancy Pelosi, D-Calif., are among 144 current and former members of Congress who signed on to the brief.

Ten consumer advocacy organizations also filed an amicus brief with the Supreme Court this month in support of the CFPB.

The Supreme Court agreed to hear arguments in the case in February, four months after a federal appeals court panel unanimously ruled that the CFPB’s funding method was unconstitutional.

Congress decided to fund the CFPB, which was created by the 2010 Dodd-Frank Act after the 2008 financial crisis, from the Federal Reserve out of “needed independence from unpredictable annual funding cycles,” according to the brief.

Though the CFPB bypasses the annual appropriations process, its director is required to justify its budget to the House biannually, the lawmakers wrote, and Congress set an annual cap on the agency’s budget at a “modest” level using a portion of Federal Reserve earnings.

In the October ruling, Judge Cory Wilson, a member of the three-judge panel on the 5th Circuit Court of Appeals, called the funding mechanism a “scheme” that is “unique across the myriad independent executive agencies across the federal government.”

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The Biden administration appealed the 5th Circuit’s decision to the Supreme Court, but a final decision could be delayed until June 2024 to hear other arguments in the case. In the brief, lawmakers concluded succinctly that “The judgment should be reversed.”

Source: CNBC

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