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Supreme Court upholds CFPB funding structure: NPR

The U.S. Supreme Court has rejected a challenge to how the CFPB is funded.

Al Drago/Getty Images


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Al Drago/Getty Images


The U.S. Supreme Court has rejected a challenge to how the CFPB is funded.

Al Drago/Getty Images

The U.S. Supreme Court has upheld how the Consumer Financial Protection Bureau is funded.

The opinion was written by Judge Clarence Thomas, who overturned the 5th Circuit’s decision. Justices Neil Gorsuch and Samuel Alito dissented.

Congress created the CFPB after the 2008 financial crash to protect consumers from what were considered predatory and deceptive practices by financial institutions. Since then, the bureau has implemented consumer protections for transactions ranging from mortgages to credit cards. But payday lenders have for years fought regulations that would limit excessive fees charged on small loans of just a few hundred dollars — fees that often end up costing people thousands of dollars.

Then, last year, the 5th Circuit Court of Appeals ruled that the CFPB’s structure was unconstitutional because, instead of an annual congressional appropriation, Congress had set the agency’s funding at a capped amount from bank fees paid to the Federal Reserve.

The government appealed to the Supreme Court because many other agencies receive similar funding, including the Federal Reserve itself; the FDIC, which insures bank deposits; the Office of the Comptroller of the Currency, which licenses and regulates all national banks; and potentially even Social Security and Medicare, which are financed by a specific tax.

This story will be updated.

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