Supreme Court Upholds CFPB Funding Structure As Constitutional

On May 16, 2024, the U.S. Supreme Court issued its decision in Consumer Financial Protection Bureau v. Community Financial Services Association of America, Ltd. In an opinion by Justice Thomas, the Court held, 7-2, that Congress may allow the Consumer Financial Protection Bureau (CFPB) to draw money from the Federal Reserve System consistent with the Constitution's Appropriations Clause. The ruling upholds the CFPB's funding structure and suggests that other government entities with permanent funding structures are here to stay.

The case centered on trade associations representing payday lenders and credit access businesses ("the associations"). The associations argued that the CFPB's funding mechanism – established by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) – violates the Appropriations Clause. The Appropriations Clause states that "[n]o Money shall be drawn from the Treasury, but in Consequence of Appropriations made by