The Consumer Financial Protection Bureau is currently the target of litigation that threatens to unravel the entire agency. Woodstock Institute is joining 90 other state and local nonprofits in signing onto an amicus brief defending the CFPB from this attack on American consumers.
In an unprecedented, radical ruling, the Fifth Circuit Court of Appeals has declared the Consumer Financial Protection Bureau’s (CFPB) funding mechanism unconstitutional. The decision has been appealed to the US Supreme Court (SCOTUS) with oral arguments likely to be held this fall. If upheld, this would be a devastating blow to efforts at reigning in abuses in the financial sector and protecting consumers.
Created in 2010, the CFPB was enacted under the Dodd-Frank Act as a response to the costs borne by millions of Americans in the wake of the 2008 financial crisis. Predatory lenders enticed households into taking on debt they couldn’t afford and didn’t understand. When home values plummeted, these consumers found themselves plunged into high-interest debt with the value of their savings eroded.
The CFPB was created to have one central body responsible for protecting regular Americans from these abusive financial practices. This meant that lenders who previously had only been subject to scattered federal oversight (if any at all) were now directly under the CFPB’s supervision. It’s no wonder that predatory lenders are now seeking to use the courts to gut the agency.
If SCOTUS were to uphold this decision, they would be undermining an agency that has obtained over $14 billion for American consumers. This would amount to an unacceptable attack on regular Americans in favor of predatory lenders, Wall Street, and their allies in Congress.
Along with 90 other state and local nonprofits, Woodstock Institute is signing onto the Berkeley Center for Consumer Law and Economic Justice’s amicus brief defending the constitutionality of the CFPB’s funding. The brief demonstrates that the CFPB’s funding mechanism is constitutional and fully consistent with other government agencies. It’s the Fifth Circuit’s legal reasoning that goes against established norms in a blatant attempt at undermining consumer protection regulations.
Click below to download the full text of the amicus brief: