March 24, 2023
A U.S. appeals court ruled that the Consumer Financial Protection Bureau’s funding structure is constitutional as the Supreme Court prepares to consider the question later this year.
Latest Ruling: A three-judge panel of the U.S. Court of Appeals for the Second Circuit said it cannot find Supreme Court precedent for a Fifth Circuit ruling that the bureau’s funding through the Federal Reserve violates the U.S. Constitution’s separation of powers.
Outlook: The Supreme Court is slated to take up the CFPB’s appeal of the Fifth Circuit ruling during its next term, which starts in October. A decision is unlikely before next year.
Governance Question: The Supreme Court case could also renew the debate over whether the CFPB’s single-director governance should be replaced with commission-based leadership, as ICBA has long advocated. The high court previously ruled that the CFPB's governance structure is unconstitutional and that the president must have the authority to remove the bureau head.