Supreme Court Rejects Constitutional Challenge to CFPB’s Funding Mechanism

In a 7-2 decision, the U.S. Supreme Court rejected a constitutional challenge to the CFPB’s funding mechanism, which allows it to draw its own funds from the Federal Reserve each year rather than being subject to traditional annual appropriations by Congress.  The Court held that Congress’s delegation of appropriations power to the CFPB satisfies the Appropriations Clause because Congress specified the source and purpose of the CFPB’s funding and placed a statutory cap on the amount of funds the CFPB can draw each year.

The Court’s decision overturns a previous Fifth Circuit decision finding the CFPB’s funding mechanism unconstitutional.