Big Victory For Consumers: SCOTUS Rejects Payday Lenders’ Challenge to CFPB

May 16, 2024

Big Victory For Consumers: SCOTUS Rejects Payday Lenders' Challenge to CFPB

WASHINGTON, D.C. - The U.S. Supreme Court today issued a decision in favor of the Consumer Financial Protection Bureau (CFPB), rejecting a challenge brought by payday lenders to Congress's decision about how to fund the agency.

The case came to the Court after the Fifth Circuit Court of Appeals' unprecedented ruling that funding for the Bureau violates the U.S. Constitution's Appropriations Clause, which states that the federal government may spend money to fund an activity only when Congress has passed a law "appropriating" funds for that activity.

As Public Citizen explained in an amicus brief supporting the Bureau, the CFPB's funding statute satisfies the requirements of the Appropriations Clause: It specifies the source from which the CFPB may draw funds, the amount it may draw, and the purposes for which the funds may be spent. That the funds come from a source other than general federal revenues poses no constitutional concern. Congress has long appropriated to agencies funds derived from fees, assessments, and other revenues attributable to agency activities.

Lisa Gilbert, executive vice president of Public Citizen, issued the following statement: "Since its creation in 2010, the CFPB has played a crucial role in consumer financial protection. The outcome of this case ensures that the Bureau's work protecting consumers in areas concerning credit cards, payday lending, home buying, and debt collection can continue."