The Supreme Court seemed not to be in a position to decide the case

Friends-of-the-court filings against the CFPB are a waste of time and money, and their implications for mortgage lenders

“The Constitution gives Congress the power of the purse,” requiring government spending to be “pursuant to funds appropriated by Congress,” she says. “And here the CFPB was intentionally designed by its creators to not operate pursuant to appropriated money.”

The government appealed to the Supreme Court due to the fact that there are many other agencies funded the same way.

Elizabeth Warren, who served in the Obama administration, said that a bad decision in the Supreme Court could wreak havoc on the financial security of millions of families.

That is undoubtedly why a total of 30 friend-of-the-court briefs have been filed in the CFPB case. What distinguishes the briefs supporting the CFPB is that they have been filed, not just by the usual suspects, but by an array of groups that don’t normally side with regulators. The homebuilders and the mortgage bankers warn of the negative effect a decision against the CFPB could have on the housing market.

Representing them, lawyer Robert Loeb notes that the regulations established by the CFPB for residential mortgages provide a uniform set of rules that protect not just consumers, but also the people issuing and servicing loans. If they follow the rules, they are protected from liability.

“If those rules were to just disappear,” Loeb says, “there could be a freeze-up of the mortgage system,” and the resulting “paralysis” could have “severe consequences for consumers, for bankers and for the economy as a whole.”

The Military Lending Law and Payday Lending: A Rebellious Challenge to the US Department of Defense and the Military and Veterans Associations

There is a coalition of military and veterans organizations that is siding with the CFPB. The Military Officers Association of America notes that Congress gave the Bureau the authority to enforce the Military Lending Act and other laws in order to protect the financial well-being of service members and their families.

“The immediate effect on servicemembers would be, you have a law that’s on the books to protect them, and there’s no real policeman,” Titus says. “The overall impact of that is frightening to think about.”

Part of the reason the military is especially worried is that young servicemembers with a regular pay check and a job are particular targets for payday lending businesses. Online lenders can reach members of the military anywhere in the world, and most military bases have signs surrounding them that say “payday lender.” The Military Lending Act was enacted to protect servicemen and women from unfair practices by loan providers, and in recent years theCFPB has brought several important enforcement actions under this act to stop excessive rates on loans and to protect servicemen from being taken advantage of.

Though not all of the business world is on the agency’s side, the payday lenders seem to be relatively on their own in this case. Lawyer Walker is not surprised. Sometimes it takes a rebel like the payday lenders to bring a structural challenge to a federal agency.

Can the Consumer Financial Protection Bureau be Conserved? After the Fifth Circuit Court of Appeals ruled that the CFPB’s structure is unconstitutional

Then last year, the Fifth Circuit Court of Appeals, which covers Texas and some southern states, ruled the CFPB’s structure is unconstitutional. The appropriations clause of the Constitution forbids congress from setting the agency’s funding at a certain amount without an appropriation, but Congress does this instead with banking fees.

“They don’t even have to go to congress to get their money,” noted an incredulous Chief Justice John Roberts. “Isn’t that something we should factor into the substantive question?”

Roberts and the other conservative judges on the court want to open up a new world of legal questions surrounding other agencies, so it is possible they will go further now.

Lawyers for the lenders did not answer questions for the article. Helgi Walker is an attorney who represents 21 former members of Congress who are opposed to the CFPB.

Congress created the Consumer Protection Bureau to protect consumers against financial institutions that were seen as predatory and dishonest during the financial crisis. The Consumer Financial Protection Bureau (CFPB) has established consumer protections for financial transactions. It has won $17.5 billion in restitution and taken steps to cancel debts for some 200 million eligible Americans, according to the agency.

There are concerns that the existence of the Consumer Financial Protection Bureau may be in danger because of Tuesday’s arguments at the U.S. Supreme Court.

If you have a mortgage, credit card or loan, you may have more protection against deceptive practices today compared to when the financial crash happened. Those protections are likely to be in jeopardy.

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

Why is the CFPB so-called a monopoly? A common misconception of Justice Kagan, Jackson, Thomas and Sotomayor

The Solicitor General said that the Constitution’s Framers created similar funding structures.

Congress hasn’t determined how much this agency should be spending, Francisco said. “Instead, it has delegated to the director [of the CFPB], the authority to pick his own appropriation subject only to an upper [capped] limit.”

Francisco’s argument that the CFPB is funded by a appropriation was questioned by the judge. I am having trouble with the word “perpetual” because it is implied that a future Congress could not change it, even if they wanted to. There is nothing permanent about this.

But several of the justices, both conservative and liberal, flatly told Francisco that his argument made no sense because it had no limiting principle.

It’s “not intelligible,” said Justice Amy Coney Barrett. We’re all trying to figure it out. what’s the standard that you would use.” How do you decide if $600 million is enough or if it’s too much?

Justice Elena Kagan caustically observed that $600 million basically amounts to “a rounding error in the federal budget.” “We’re at a total loss because of the way the budget is funded,” Justice Sotomayor said.

Moments later, Justice Ketanji Brown Jackson raised a different concern, worrying about the “separation of powers” and the “judiciary suddenly becoming a super legislator.”

But Justice Kagan pointed out that standing appropriations like this one were common at the founding. “So you’re just flying in the face of 250 years of history,” she said.

Justice Clarence Thomas seemed angry as well. He wanted to know if the funding of the CFPB was in violation of the appropriations clause.