The Fifth Circuit Court of Appeals just delivered a big blow to the brainchild of Sen. Elizabeth Warren (D-MA) through the 2010 Dodd-Frank law that allowed the bureau to be funded through the Federal Reserve, and bypass the congressional appropriations process. Republicans have fought it for years, saying that the way it was set up makes them not accountable, without review.
The Fifth Circuit just ruled that the funding mechanism of the Consumer Financial Protection Bureau (CFPB) was unconstitutional.
“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,” a three-judge panel of the 5th U.S. Circuit Court of Appeals ruled in a case brought by a payday lending group against the CFPB’s 2017 payday lending rule.
In other words, they were improperly delegating something that was their responsibility — their power to exercise.
“Even among self-funded agencies, the Bureau is unique,” Judge Cory Wilson wrote Wednesday. “The Bureau’s perpetual self-directed, double-insulated funding structure goes a significant step further than that enjoyed by the other agencies on offer.”
We know that giving power to unaccountable bureaucracies — something that Democrats love to do, especially when they are in control of the bureaucracies — ends up being a bad idea, so this is a great decision.
It is probably going to be appealed further, so this is likely not the end of it.
But it sounded like the Republicans were already welcoming the decision and gearing up to take back their oversight. Here’s Rep. Tom Emmer (R-MN).
The Fifth Circuit rules that the CFPB, created by Elizabeth Warren via the Dodd-Frank Act, is unconstitutional and must be brought under congressional appropriations. Fortunately, @FinancialCmte has a plan for that. pic.twitter.com/gumKXNNxd2
— Tom Emmer (@RepTomEmmer) October 19, 2022
Meanwhile, Warren is throwing a hissy fit, which you know is a good thing.
This is a lawless and reckless decision. @CFPB has returned billions of dollars to Americans by doing its job, and its funding is clearly constitutional. Extreme right-wing judges are throwing into question every rule the CFPB enforces to protect consumers and businesses alike. https://t.co/rktOfC46R5
— Elizabeth Warren (@SenWarren) October 19, 2022