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February 27, 2023

Supreme Court Agrees to Review Fifth Circuit’s Deplorable Decision Invalidating CFPB Funding, But that’s Just the Beginning

WASHINGTON, D.C.— Stephen Hall, Legal Director and Securities Specialist, issued the following statement in response to this morning’s order from the U.S. Supreme Court granting review of the Fifth Circuit’s decision holding that the funding mechanism for the Consumer Financial Protection Bureau (CFPB) violates the U.S. Constitution:

“The American people were justifiably outraged at the widespread and shocking exploitation of financial consumers in the years before the 2008 financial crash, notably including the many abuses in the subprime mortgage markets.  Their elected representatives, the President and Congress, responded to those despicable acts by creating the CFPB, a powerful, independent regulatory watchdog who would fight the power and money of the largest financial firms in the country on behalf of Main Street families.

“The financial industry hates the CFPB and has been trying to persuade unelected judges to cripple it because it has forced them to comply with the law and stop abusing hardworking Americans with credit and debit cards, savings and checking accounts, and other financial products.  Unfortunately, the Fifth Circuit did the industry’s dirty work in a profoundly flawed decision that threatens the viability the most important champion of consumer rights and fair play in the financial markets ever established.  It must be reversed by the Supreme Court for the sake of every American consumer who is vulnerable to abusive practices at the hands of banks, mortgage companies, payday lenders, and countless other financial services firms.

“The first hurdle in that process has thankfully been overcome, as the high Court today has agreed to hear the case.  In October last year, the Fifth Circuit held in Community Financial Services Association of America, Ltd. v. Consumer Financial Protection Bureau that the statutory funding mechanism for the CFPB violates the Appropriations Clause of the Constitution.  The decision was as deeply flawed as it was destructive.  On the merits, the court misread the plain language of the Appropriations Clause, and it defied a long list of court precedents validating the type of funding mechanism Congress determined was best for the CFPB.

“With respect to its impact, few decisions threaten so many harmful consequences. Most immediately, the Court vacated the CFPB’s payday lending rule protecting consumers from some of the most notorious financial predators in the markets today.  Much more broadly, it cast doubt on the validity of all the CFPB’s past and ongoing rulemaking and enforcement work.  It also threatened upheaval in much of the financial services industry, as many firms rely on the CFPB’s rules and exemption in their operations.  The decision even cast a cloud over the constitutional legitimacy of other important agencies, including the Federal Reserve.  Better Markets will join the fight, along with other public interest advocates, to overturn the Fifth Circuit’s ruling in this historic case.”


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

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