Illinois advocacy groups are warning of far-reaching harm to consumers if the Supreme Court sides with the Payday Lenders and Defunds the Consumer Financial Protection Bureau


For Immediate Release:
October 3rd, 2023

Rob Mayo (Woodstock Institute)

Today, the Supreme Court will hear oral arguments in one of this term’s most important cases, Consumer Financial Protection Bureau (CFPB) v. Community Financial Services Association of America (CFSA). The CFSA is a trade association representing payday lenders and other non-bank lenders that offer small-dollar loans. A ruling against the CFPB could severely weaken or even dismantle the agency along with its capacity to protect everyday Americans from unfair and abusive financial practices, including scams, junk fees, and predatory lending.

The CFPB has obtained over $17.5 billion in relief for about 200 million Americans since its founding in 2011. The Bureau has taken action on over 160,000 complaints from Illinois consumers specifically largely to address unfair credit reporting and abusive debt collection practices.

The payday lenders’ case against the CFPB evolved into an existential threat to the Bureau when the Fifth Circuit Court of Appeals declared the CFPB’s independent funding mechanism unconstitutional. Experts have called this ruling radical and unprecedented given the long history of Congress designing agencies to be funded outside the annual appropriations process. Other courts, including the Second Circuit Court of Appeals, have already refuted the decision. Should the Supreme Court rule against the CFPB, the agency’s funding would be subject to the full appropriations process and thus the whims of Congressional politics.

A ruling overturning the CFPB’s funding could also implicate the legality of the many other programs and agencies also funded outside the annual appropriations process, including the Federal Reserve, the OCC, the FDIC, Medicare, and Social Security. Everyday Americans and our financial system rely on the stability of these agencies and programs.

“Payday lenders, for good reason, are wildly unpopular with the general public and now, appropriately enough, their lawsuit against the nation’s consumer protection agency, which is being considered by the Supreme Court, threatens to decimate the agency and set back every American who will be harmed by scams, unfair junk fees, debt collection, credit reporting errors, and medical debt,” said Brent Adams, Senior Vice President of Policy and Advocacy at Woodstock Institute. 

In its 12 years of existence, the CFPB has undertaken countless efforts to protect consumers from abusive financial practices such as:

Advocates are not the only ones warning about the ramifications of this case. Business groups have expressed their own concerns about how an unfavorable decision could destabilize markets by creating extreme regulatory uncertainty while also undermining efforts to create a more inclusive economy where everyone can compete.

Quotes by Consumer Advocates

“It’s no wonder why the CFPB is overwhelmingly popular among Democrats, Republicans, and independents alike: they know that the agency stands between them and powerful corporate actors looking to defraud consumers. This is especially important for Black, migrant, low-income, and elderly populations, who are more vulnerable to financial predation,” said Julie Sampson, Co-Director of Citizen Action/Illinois

“Government should protect the people and that’s exactly what the CFPB does. Every American who’s had to fight for fair treatment from a company should be worried about this ruling. The CFPB is the last line of defense between the American people and anyone trying to defraud them,” said Meegan Dugan Adell, Director at New America Chicago.

“All housing advocates should be concerned about what a ruling against the CFPB would mean for our work,” said Sharon Legenza, Executive Director of Housing Action Illinois. “Over the past 12 years, the agency has been an ally in addressing unfair practices in credit reporting, tenant screening, and mortgage lending. Without the CFPB, it’ll be more difficult to ensure equitable access to housing for low-income people and communities of color.”

Financial Inclusion For All Illinois issued the following statement: “We know that one huge reason for our country’s racial wealth gap is a lack of fair and equal access to financial products. Since it was founded in the wake of the subprime mortgage crisis’s devastating impact on communities of color, the CFPB has been a valuable participant in protecting these communities from unfair and abusive financial practices through its enforcement of fair mortgage lending and anti-discrimination laws. Because racial gaps in loan denial and mortgage costs remain persistent, our country needs a strong government agency dedicated to protecting consumers of color.”

Calvin Holmes, President of the Chicago Community Loan Fund, a Community Development Financial Institution committed to providing affordable, responsible financing to benefit low-to-moderate-income neighborhoods, said, “As an African American-led Community Development Financial Institution focused on closing the racial wealth gap and revitalizing historically marginalized communities of color in Chicago, we serve many of this area’s most vulnerable residents, those who are most likely to be victimized by predatory lending and other abusive practices. These people, our customers, are both the most likely to be accurately reflected in the CFPB’s data collection efforts and the most in need of protection against bad faith actors in the financial services industry. The CFPB’s work to safeguard lower wealth communities from being robbed of their resources, arm them with the tools to make wise financial decisions, and ensure that they are afforded every opportunity to thrive is far too vital to hold hostage to the political vicissitudes of the federal appropriations process.”

Quotes by Business Groups

Phil Goldfeder, CEO of the American Fintech Council, an industry association representing responsible fintech companies and innovative banks, said, “Upending CFPB rules could derail innovation by pushing regulatory clarity further out of reach. The stakes of this Supreme Court case go far beyond one particular CFPB rule. If the Court strikes down the rule using the plaintiff’s constitutional argument, that same logic will apply to any other regulation authored by the CFPB. These don’t just include the rule regarding payday and high-cost installment lending but also the rules establishing mortgage protections in response to the Great Recession, a fair lending regime that has not stifled tech-based underwriting, and transparency in price disclosures that has promoted competition and innovation allowing the best firms to win.” 

“Empowering the Consumer Financial Protection Bureau is not just about protecting wallets,” said Illinois Hispanic Chamber of Commerce President and CEO Jaime di Paulo. “It’s about safeguarding the dreams and aspirations of our community, forging a path towards an inclusive economy where everyone’s financial well-being truly matters.”


Woodstock Institute advances economic and racial justice within financial systems through research and advocacy across Illinois and the United States. Among our areas of focus are predatory lending, access to banking, debt collection, and municipal fines and fees.