White House to Supreme Court: Quickly Overturn CFPB Ruling

The Biden Administration has submitted a filing to the Supreme Court asking them to reverse the decision on the CFPB's constitutionality. Learn why.

David Baumann


Feb 8



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David Baumann

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David Baumann

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SCOTUS filing warns of confusion surrounding current and historic bureau enforcement actions.

To avoid uncertainty in the financial services industry, the U.S. Supreme Court must quickly overturn a federal appeals court ruling that found the CFPB’s funding scheme unconstitutional, the Biden Administration said in a new filing with the high court.

“The decision below frustrates the CFPB’s ongoing activities, calls into question more than a decade’s worth of its past actions, and inflicts severe uncertainty on the financial services industry,” the administration said, in responding to the latest filing by the Consumer Financial Services Association of America (CFSA).


In October, a three-judge panel from the Fifth Circuit Court of Appeals ruled that since the CFPB does not go through the annual appropriations process, its funding was unconstitutional. The agency’s funding comes from the Federal Reserve.

The court said that since the funding was unconstitutional, so was the CFPB’s payday lending rule, which the CFSA—a group representing the payday lending industry—was challenging.

Where Things Stand

The Biden Administration is appealing that ruling.

The Supreme Court is expected to discuss the case at its Feb. 17 conference before deciding whether to either accept it or let the Fifth Circuit’s ruling stand.

The administration has asked the court to rule on the case during its current term, saying that the appeals court ruling calls into question all agency actions since it was created in the Dodd-Frank Act.

Inside the Filing

In its latest filing, the administration said the appeals court ruling has affected more than half of the CFPB’s active enforcement actions, noting that five have been stayed while motions based on the ruling are pending in seven others.

And the administration said the appeals court ruling clearly was incorrect.

“The decision below declares invalid a federal statute, conflicts with the decision of another court of appeals, and marks the first time in our Nation’s history that any court has held that Congress violated the Appropriations Clause by enacting a law authorizing spending,” the filing read.

Further, the administration added, the CFSA cannot “meaningfully distinguish” the CFPB’s funding from other agencies that are funded outside the appropriations process.

Those agencies include the NCUA, which is funded by payments.

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