The Supreme Court released their decision in the Consumer Financial Protection Bureau v. Community Financial Services Assn. of America, Ltd. case, which was brought to challenge the funding of the CFPB as inconsistent with the Appropriations Clause.
The challengers argued that this funding mechanism violated the appropriations clause, which provides that “no money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” But the majority rejected this argument, explaining that “an appropriation is simply a law that authorizes expenditures from a specified source of public money for designated purposes.” “The statute that provides the Bureau’s funding meets these requirements,” the majority writes.
The 59 page opinion was a 7 – 2 decision. The majority decision reversed a 2022 ruling by the 5th Circuit U.S. Court of Appeals that found the CFPB’s funding mechanism was unconstitutional.
What does this mean for us? There are a couple new regulations on hold until this decision was determined, specifically:
- Payday Lending Rule
- Section 1071 Small Business Reporting
- Credit Card Late Fees
Stay tuned for more details as they are made available. If you need assistance in implementing any compliance changes, please contact TCA at [email protected] or (800) 934-7347 as TCA is A Better Way to move towards compliance.
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