Conservatives hope Supreme Court defangs US consumer watchdog
By John Kruzel
WASHINGTON (Reuters) — The U.S. Consumer Financial Protection Bureau is currently pursuing nearly two dozen lawsuits accusing prominent defendants including Fifth Third Bank, TransUnion (NYSE:TRU) and Moneygram of financial misconduct. But the watchdog's future may be in peril thanks to a case now before the U.S. Supreme Court.
The agency's 300-plus enforcement actions from 2012-22 have delivered $16 billion of relief to American consumers, drawn in part from a $3.7 billion settlement last year with Wells Fargo, according to CFPB data.
Yet as it continues to police financial wrongdoing, the CFPB faces an existential threat in the case pursued by two trade groups representing the payday loan industry to be argued before the justices on Oct. 3 — the second day of the Supreme Court's new term — that could grind the agency's operations to a halt.
A ruling is expected by the end of June. The court's 6-3 conservative majority has limited the regulatory power of federal agencies in a series of rulings in recent years.
Established to curb predatory lending following the 2008 global financial crisis, the CFPB under an arrangement designed by congressional Democrats draws money annually from the U.S. Federal Reserve rather than budgets passed by Congress. The justices will weigh a challenge to this funding structure that could starve the agency's coffers and place its existing rules on shaky legal ground.
President Joe Biden's administration is appealing a lower court's ruling that embraced arguments made by the challengers that the CFPB's «perpetual budget» violated the U.S. Constitution's «appropriations clause,» which vests spending authority in Congress.
The agency's supporters have said unraveling
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