Connect with us

Hi, what are you looking for?

Smart Success Strategy – Investing and Stock NewsSmart Success Strategy – Investing and Stock News

Investing

Supreme Court rules in favor of CFPB, brainchild of Sen. Elizabeth Warren

The Supreme Court on Thursday ruled that the funding mechanism that feeds the Obama-era agency Consumer Financial Protection Bureau (CFPB) is constitutional.

In a 7-2 decision, authored by Justice Clarence Thomas, the court held that Congress uniquely authorized the bureau to draw its funding directly from the Federal Reserve System, therefore allowing it to bypass the usual funding mechanisms laid out in the Appropriations Clause of the Constitution. 

‘For most federal agencies, Congress provides funding on an annual basis. This annual process forces them to regularly implore Congress to fund their operations for the next year. The Consumer Financial Protection Bureau is different. The Bureau does not have to petition for funds each year. Instead, Congress authorized the Bureau to draw from the Federal Reserve System the amount its Director deems ‘reasonably necessary to carry out’ the Bureau’s duties, subject only to an inflation-adjusted cap,’ Thomas wrote. 

‘In this case, we must decide the narrow question whether this funding mechanism complies with the Appropriations Clause. We hold that it does,’ the opinion states. 

The CFPB launched in 2008 with the help of Sen. Elizabeth Warren, D-Mass., in the aftermath of the market crash, with authority to regulate banking and lending agencies via federal rules.

A group of banking associations, represented by former solicitor general Noel Francisco, sued the CFPB, arguing that because the agency, not Congress, decides the amount of annual funding and draws it from the Federal Reserve, it violates the Appropriations Clause. 

The Supreme Court’s majority disagreed, saying, ‘Although there may be other constitutional checks on Congress’ authority to create and fund an administrative agency, specifying the source and purpose is all the control the Appropriations Clause requires.’

‘The statute that authorizes the Bureau to draw money from the combined earnings of the Federal Reserve System to carry out its duties satisfies the Appropriations Clause,’ the opinion states. 

Justice Samuel Alito dissented from the decision, joined by Justice Neil Gorsuch, saying, ‘The Court upholds a novel statutory scheme under which the powerful [CFPB] may bankroll its own agenda without any congressional control or oversight.’

‘According to the Court, all that the Appropriations Clause demands is that Congress ‘identify a source of public funds and authorize the expenditure of those funds for designated purposes,’’ Alito wrote. 

‘Under this interpretation, the Clause imposes no temporal limit that would prevent Congress from authorizing the Executive to spend public funds in perpetuity,’ he stated. 

‘In short, there is apparently nothing wrong with a law that empowers the Executive to draw as much money as it wants from any identified source for any permissible purpose until the end of time.’ 

‘That is not what the Appropriations Clause was understood to mean when it was adopted. In England, Parliament had won the power over the purse only after centuries of struggle with the Crown. Steeped in English constitutional history, the Framers placed the Appropriations Clause in the Constitution to protect this hard-won legislative power,’ he said. 

Alito continued, ‘There are times when it is our duty to say simply that a law that blatantly attempts to circumvent the Constitution goes too far. This is such a case.’ 

‘Today’s decision is not faithful to the original understanding of the Appropriations Clause and the centuries of history that gave birth to the appropriations requirement, and I therefore respectfully dissent,’ he concluded. 

This post appeared first on FOX NEWS
Enter Your Information Below To Receive Latest News, And Articles.



    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    Editor's Pick

    The energy revolution is here to stay, and electric vehicles (EVs) have become part of the mainstream narrative. Despite geopolitical tensions and uncertainty, the...

    Editor's Pick

    Overview Mexico’s Sinaloa state hosts a number of prolific silver and gold mines, including McEwen Mining’s (TSX:MUX) El Gallo Complex, Americas Gold and Silver’s...

    Editor's Pick

    Uranium is an important energy sector commodity, and its rising value has attracted investor interest. 2023 has seen uranium prices solidly above the important...

    Investing

    A new survey shows that the presidential race between former President Donald Trump and President Biden is thin, but Biden faces a deficit in...

    Disclaimer: smartsuccessstrategy.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


    Copyright © 2024 smartsuccessstrategy.com