Another Appeals Court Finds Progressive Consumer Financial Protection Bureau Unconstitutional


Posted originally on the conservative tree house on October 20, 2022 | Sundance

The Consumer Financial Protection Bureau (CPFB) was originally created by congress (Elizabeth Warren lead) as a quasi-constitutional watchdog agency to reach into the banking and financial system, under the guise of oversight, and extract money by fining entities for CFPB defined regulatory and/or compliance violations.

Essentially, the CFPB is a congressionally authorized far-left extortion scheme in the banking sector.  The CFPB levies fines; the fines generate income; however, unlike traditional fines that go to the U.S. treasury, the CFBP fines are then redistributed to left-wing organizations to help fund their political activism.

The Consumer Financial Protection Bureau (CFPB) was the brainchild of Senator Elizabeth Warren as an outcome of the Dodd-Frank legislation. Within the CFPB Warren tried to set up the head of the agency, the Director, in a manner that that he/she would operate without oversight. Unfortunately, her dictatorial-fiat-design collapsed when challenged in court.  Backstory #1 – Backstory #2

Previously, a federal court found the CFPB Director position held too much power and deemed it unconstitutional. The court decision noted that giving the President power to fire the Director would fix the constitutional problem.  However, a second set of legal challenges targeted the core of the CFPB scheme, the financing.

WASHINGTON DC – An appeals court on Wednesday ruled that the Consumer Financial Protection Bureau’s funding mechanism is unconstitutional, in a victory for lenders that have targeted the agency’s structure in a years-long bid to tamp down regulation.

A three-judge panel of the 5th U.S. Circuit Court of Appeals ruled that the design of the CFPB violated the Constitution because it receives funding through the Federal Reserve, rather than appropriations legislation passed by Congress. Democrats established the structure when they created the CFPB in the 2010 Dodd-Frank law as a way to shield the bureau from political pressures that could impact its oversight of the finance industry.

The judges also vacated a 2017 small-dollar lending rule targeted by the payday lending advocates who brought the case — the Community Financial Services Association of America and the Consumer Service Alliance of Texas.

“Congress’s decision to abdicate its appropriations power under the Constitution, i.e., to cede its power of the purse to the Bureau, violates the Constitution’s structural separation of powers,” the judges wrote.

The appeals court ruling marked the latest victory for the finance industry, which has fought for years in Congress and the courts to blunt the CFPB’s reach and limit its ability to police financial services. Republican lawmakers have also worked for years to stifle the CFPB and revamp its structure, arguing the agency lacks accountability.

“Even among self-funded agencies, the Bureau is unique,” Judge Cory Wilson wrote Wednesday. “The Bureau’s perpetual self-directed, double-insulated funding structure goes a significant step further than that enjoyed by the other agencies on offer.”

The CFPB Wednesday declined to say whether it would appeal the decision to the full 5th Circuit. CFPB spokesperson Sam Gilford said “there is nothing novel or unusual about Congress’s decision to fund the CFPB outside of annual spending bills.” (read more)

Here’s where we remind everyone of the importance of regular budget appropriations. There hasn’t been a standard federal budgetary spending process in place since 2008. Every budget since Obama’s first term has been a series of continuous resolutions, omnibus spending bills and appropriations without regular order.

This has not been an accidental outcome.

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