Dodd, Frank and Congressional Democrats Argue CFPB Funding Is Legal

A group of 144 Democratic current and former members of Congress have submitted a brief in support of the CFPB's funding mechanism. Learn why.

David Baumann


May 15



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David Baumann

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David Baumann

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Brief filed in support of bureau and its funding scheme.

Arguing that the CFPB’s funding structure was “carefully crafted to allow the agency to best accomplish the critical tasks it was created to perform,” 144 Democratic current and former members of Congress have filed a brief with the U.S. Supreme Court supporting the agency’s funding mechanisms.

Among those filing the brief were former Sen. Christopher Dodd, D-Conn., and Rep. Barney Frank, D-Mass., whose names are found on the legislation creating the agency. Other lawmakers signing onto the brief include chairs or ranking Democrats on the committees with jurisdiction over the CFPB as well as Senate Democratic leader Charles Schumer of New York and House Democratic leader Hakeem Jeffries of New York.


The Supreme Court is considering a request from the Biden Administration to overturn a Second Circuit Court of Appeals ruling that found the CFPB’s funding process was unconstitutional because the agency’s funding did not come through the appropriations process.

That appeals court ruled, in a case filed by the association representing payday lenders, that the funding scheme was illegal because it did not go through the annual appropriations process. Instead, the agency draws its funding down from the Federal Reserve.

The Brief

In their brief, the current and former lawmakers said that their legislative experience makes them well aware of the role the CFPB plays in efforts to avoid another financial crisis.

They said that in studying the causes of the 2008 financial crisis, Congress determined that the lack of steady funding for financial regulators helped fuel that crisis.

“To solve these problems, Congress consolidated federal regulatory authority for certain consumer protection laws into a single new agency—the CFPB—and provided the CFPB with a steady but capped appropriation,” the brief states.

Additionally, they said that by appropriating funds on a continuing basis—but requiring that agency officials testify semi-annually before House and Senate committees—the Dodd-Frank Act makes the CFPB more accountable than other financial regulators.

Those other regulators, including the NCUA, do not have specific requirements that their officials testify on Capitol Hill, the brief notes.

Further, they added, while most other agencies are funded through the appropriations process, that process is not contained in the U.S. Constitution.

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