WASHINGTON, D.C.—Stephen Hall, Legal Director and Securities Specialist, issued the following statement in connection with the publication of a new Better Markets report, The Supreme Court and Your Wallet: Cases and Trends that Define the Ability of the Wall Street Cops to Protect Every American from Financial Predators.
“Each term, the U.S. Supreme Court decides cases that have a profound impact on the financial well-being of every American who is working, saving, and investing for a better standard of living and a decent retirement. Those decisions tend to be overshadowed by the Court’s more headline-grabbing pronouncements that address controversial social policy questions surrounding abortion, gun control, and others. But the bottom line is that anyone who relies on a financial product or service—a checking account, credit card, mortgage, student loan, car loan, retirement plan, college savings fund, or brokerage account—has a stake in the Supreme Court’s decisions. The Court ultimately determines the authority of agencies to police the financial markets and the ability of investors to recover their losses when they have been victimized.
“For example, as we explain in the report, on the line this term is the fate of the Consumer Financial Protection Bureau (CFPB), one of the most effective agencies in the history of financial regulation. A payday lender is challenging a CFPB rule protecting borrowers from abusive practices by attacking the way the agency is funded, alleging that it violates the Appropriations Clause of the U.S. Constitution. The financial industry is coming after the CFPB because it has written strong rules against unfair and abusive financial conduct, established a robust enforcement program, and put over $17 billion back in the pockets of victimized financial consumers. How the Court rules, and the relief it orders, will have enormous implications for the future of the agency, the validity of its past rules and enforcement actions, and its ability to continue protecting consumers against fraud and abuse in the sale of a broad range of financial products and services, from payday loans to mortgages and credit cards. The case also threatens the viability of other critically important agencies that have essentially the same funding structure that fuels the CFPB, including the Federal Reserve and the other banking regulators.
“In our report, we profile noteworthy decisions from the last term surrounding financial regulation, flag cases with a potentially huge impact this term—including the assault on the CFPB—and take a closer look at the war on the administrative state that is playing out in the Court. The reality is that the Supreme Court’s conservative majority may issue decisions that imperil agency rules and even the agencies themselves, exposing everyday consumers and investors to more fraud and abuse, with fewer options to recover for the harms they suffer at the hands of predators in the financial services industry.”
You can find the full report here.
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Better Markets is a non-profit, non-partisan, and independent organization founded to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.
