LOS ANGELES, March 23, 2023 – The California Reinvestment Coalition responded today to news that the Second Circuit Court of Appeals unanimously declared the funding structure of the Consumer Financial Protection Bureau (CFPB) is constitutional.
“We’re glad to see the Second Circuit Court of Appeals affirm what we believed as correct from the beginning,” said Paulina Gonzalez-Brito, Chief Executive Officer of CRC. “The CFPB is vital to the financial stability of low-income and Black, Indigenous and People of Color of communities. Yet it is currently under attack. We’re relieved to see CFPB clear the Second Circuit. Now we hope the Supreme Court makes the right decision.”
The Second Circuit Court of Appeals opinion explicitly rejects the arguments offered in the Fifth Circuit decision, which is headed to the Supreme Court.
Gonzalez-Brito continued, “In finding the CFPB’s funding structure to be unconstitutional, the Fifth Circuit decision relied on problematic arguments that threaten to undermine the CFPB as well as other federal agencies that do not receive their funding directly through Congressional appropriations. If upheld, the Fifth Circuit decision would upend consumer protections, enable predatory lenders and sow chaos in our financial markets.”
In October, the U.S. 5th Circuit Court of Appeals ruled that “the CFPB’s funding mechanism violates the Appropriations Clause of the U.S. Constitution” and vacated its payday lending rule. Since then, CRC, its members and nonprofit organizations from across the country have aligned to support the CFPB.
The Supreme Court has said it will review the Fifth Circuit Court’s ruling in CFPB v. CFSA in its next session.