The Consumer Financial Protection Bureau, the federal financial watchdog, is facing an existential challenge at the U.S. Supreme Court next term. The uncertainty surrounding the outcome of that case is impeding the agency’s enforcement efforts as lower courts wait for Supreme Court guidance.
The CFPB, established in 2010 in response to the Great Recession, has always courted controversy. In 2020, the Supreme Court took issue with the lack of direct presidential control over the CFPB’s director. But that ruling did not limit the agency’s powers or authorities, and the CFPB has continued to function with its full powers intact.
Next term, the Supreme Court will decide a far more significant question: Is the CFPB’s funding mechanism unconstitutional? The agency cannot function without funding.
The uncertainty surrounding the CFPB’s funding structure has impacted the CFPB’s ability to use litigation as an enforcement tool.
Read the full Bloomberg Law article here.