Supreme Court case may gut the CFPB: Consumer watchdog's ‘future is on the line,’ group says
The Supreme Court is set to hear oral arguments Tuesday in a case with the potential to gut the Consumer Financial Protection Bureau, a watchdog agency created in the wake of the 2008 financial crisis.
The case — CFPB v. Community Financial Services Association of America — hinges on the constitutionality of the agency's funding. If the High Court sides with CFSA, a trade group representing payday lenders, its ruling could have broad and significant impacts for consumers, according to legal experts and consumer advocates.
For example, any rules the CFPB has issued in the past 12 years — whether about credit cards, mortgages, payday loans or debt collection, for example — could be nullified, experts said. Some regulators like the Federal Reserve and government programs like Social Security share a similar funding model to the CFPB's; they may also be called into question.
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"[The CFPB's] future is on the line before the Court," Better Markets, a consumer advocacy group, wrote Monday.
A ruling could come as late as June 2024.
The CFPB was established in 2011 by the Dodd-Frank financial-reform law in the wake of the Great Recession.
Lawmakers created the federal agency to protect consumers from predatory financial practices. To date, it has collected $17.5 billion in financial relief for about 200 million eligible people, according to agency data.
The recent case isn't the first to pose a threat to CFPB operations. The Supreme Court ruled against the agency in a 2020 case, Seila Law v. CFPB, finding part of its structure to be
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