Consumer Financial Protection Bureau v. Community Financial Services Association Of America, Limited

601 U.S. 416 (2024)

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Nature of the Case

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Facts

The Dodd-Frank Wall Street Reform and Consumer Protection Act created an independent financial regulator within the Federal Reserve System known as D. The Act consolidated in D the authority to administer 18 existing consumer protection statutes. The Act made it unlawful for those offering consumer financial products and services “to engage in any unfair, deceptive, or abusive act or practice.” Congress vested the D with rulemaking, enforcement, and adjudicatory authority over the statutes that it administers. Congress shielded D from the influence of the political branches. Congress put a single Director with a 5-year term at D’s helm and made D removable only for inefficiency, neglect, or malfeasance. This Court held in Seila Law LLC v. Consumer Financial Protection Bureau that the combination of single-director leadership and for-cause removal protection unconstitutionally circumscribed the President’s ability to oversee the Executive Branch. Congress also provided D with a standing source of funding outside the ordinary annual appropriations process. Each year, D may requisition from the earnings of the Federal Reserve System “the amount determined by the D's Director to be reasonably necessary to carry out” its duties, subject only to a statutory cap. The Bureau cannot request more than 12 percent of the Federal Reserve System’s total operating expenses as reported in fiscal year 2009 (adjusted for inflation). D can also retain and invest unused funds from year to year, though the Director must take into account any surplus when requesting additional funds. D promulgated a regulation focused on high-interest consumer loans. P challenged the Lending Rule on statutory and constitutional grounds. P argued in part that D “takes federal government money without an appropriations act” in violation of the Appropriations Clause. P claimed that D's funding mechanism usurps Congress’s role in the appropriation of federal funds” by allowing it to take “federal money without an appropriations act.” The District Court granted summary judgment to D. The Court of Appeals reversed. It concluded that the Appropriations Clause “does more than reinforce Congress’s power over fiscal matters; it affirmatively obligates Congress to use that authority ‘to maintain the boundaries between the branches and preserve individual liberty from the encroachments of executive power.’” D appealed.