The U.S. Supreme Court has ruled in favor of maintaining the Consumer Financial Protection Bureau’s (CFPB) unique funding structure, shielding the powerful federal agency from congressional oversight.

The Supreme Court’s decision allows the CFPB to continue receiving funds directly from its parent agency, the Federal Reserve, without yearly congressional oversight, the Daily Signal reports.

Established under the Dodd-Frank Wall Street Reform and Consumer Protection Act as a response to the 2008 financial crisis, the CFPB’s funding mechanism has been a point of contention.

This method circumvents the traditional congressional budget approval process.

Justice Clarence Thomas, writing for the majority in a 7-2 decision, affirmed that this funding arrangement adheres to the constitutional appropriations clause.

This clause governs the allocation and use of federal funds.

The Court’s ruling rejected challenges that argued this funding scheme undermines Congress’s control over federal expenditures, commonly known as the “power of the purse.”

The issue reached the Supreme Court after various rulings in lower courts.

The controversy began in earnest following the CFPB’s implementation of strict regulations on small-dollar loans in 2017.

These regulations prompted two trade associations to challenge the bureau’s funding structure.

These associations contended that by not requiring annual reviews by Congress, the funding setup left the bureau too autonomous and unaccountable.

Justices Samuel Alito and Neil Gorsuch provided the dissenting opinions, voicing concerns over the separation of powers and historical precedents.

https://slaynews.com/news/supreme-court-shields-powerful-federal-agency-future-congressional-oversight/