Supreme Court OKs consumer finance bureau – Boston Herald

The Supreme Court on Thursday ruled 7-2 that the Consumer Financial Protection Bureau, the brainchild of Democratic Sen. Elizabeth Warren and long opposed by Republicans and their financial backers, does not violate the Constitution, reversing a lower court and drawing praise from consumers.

Justice Clarence Thomas wrote the majority opinion, splitting with his frequent allies, Justices Samuel Alito and Neil Gorsuch, who dissented.

The CFPB was created after the 2008 financial crisis to regulate mortgages, car loans and other consumer finance. The case was brought by payday lenders who object to a bureau rule that limits their ability to withdraw funds directly from borrowers’ bank accounts.

Unlike most federal agencies, the consumer bureau does not rely on the annual budget process in Congress. Instead, it is funded directly by the Federal Reserve, with a current annual limit of around $600 million.

Thomas reached back to the earliest days of the Constitution in his majority opinion to note that “the Bureau’s funding mechanism fits comfortably with the First Congress’ appropriations practice.”

In dissent, Alito wrote, “The Court upholds a novel statutory scheme under which the powerful Consumer Financial Protection Bureau (CFPB) may bankroll its own agenda without any congressional control or oversight.”

Outside the Supreme Court following the decision, Warren said, “The Supreme Court followed the law, and the CFPB is here to stay.”

President Joe Biden who has taken steps to strengthen the bureau called the ruling “an unmistakable win for American consumers.”

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