CHARLESTON — West Virginia Attorney General Patrick Morrisey is leading a coalition of 16 states in asking the U.S. Supreme to grant a petition concerning the constitutionality of the Consumer Financial Protection Bureau.
The case in question is Consumer Financial Protection Bureau v. Community Financial Services Association of America Ltd. Recently, the U.S. Court of Appeals for the Fifth Circuit ruled the funding mechanism of CFPB, which was formed during the Obama administration and charged with regulating much of the financial services industry without substantial oversight from Congress, is unconstitutional.
“We also recently sent a letter to CFPB asking the agency to heed the ruling from the U.S. Court of Appeals for the Fifth Circuit and cease using unconstitutionally appropriated funds,” Morrisey said. “We are now asking the Supreme Court to grant this petition to confirm everywhere — not just in the Fifth Circuit — that the CFPB cannot act as a rogue agency.
Morrisey
“These agencies should operate within the boundaries provided by the Constitution.”
The agency currently gets its funding from the Federal Reserve. If the Circuit Court ruling stands, then the bureau would need to get an annual budget approved by Congress.
The Fifth Circuit’s decision goes against the D.C. Circuit ruling, which saw no constitutional problem with the CFPB’s budgetary set-up.
According to the AG brief, “the country’s financial industry sits in a state of regulatory limbo, wondering whether the CFPB can continue … without some intervention from Congress.”
The AGs say the CFPB has indicated it will continue business as usual, “even though a federal appellate has told it change is required.”
Morrisey and the coalition are asking the Supreme Court to grant CFPB’s petition for review to resolve the issue quickly and to “reinvigorate the protections of the Appropriations Clause, not weaken it. Through congressional oversight, the Appropriations Clause ensures a level of state participation that ordinary administrative process don’t allow.”
Along with asking the Supreme Court to grant the petition, the AGs also are urging the justices to affirm the Fifth Circuit’s ruling.
Morrisey was joined in the brief by attorneys general from Alabama, Arkansas, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Montana, Nebraska, Oklahoma, South Carolina, South Dakota, Texas, Utah and Virginia.
U.S. Supreme Court case number 22-448
