Consumer Groups Thrilled with CFPB Oral Arguments

Advocates say questions indicate support for agency

David Baumann


Oct 5



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David Baumann

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David Baumann

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Going into Tuesday’s Supreme Court oral arguments over the CFPB’s funding mechanism, consumer groups had the jitters, saying that an adverse decision would have a disastrous impact on consumers.

On Wednesday, those same groups were almost giddy, after several justices appeared skeptical of the arguments presented by opponents of the agency.

“Today was a bad day for predatory payday lenders and the Wall Street lobby groups that lent their names to some very ridiculous claims,” said Elyse Hicks, consumer policy counsel at Americans for Financial Reform, said. “None of their legal arguments passed the red-face test, and even the questions from the conservative justices reflected that reality.”

Case Background

On Tuesday, the Supreme Court heard arguments in an appeal of the Fifth Circuit Court of Appeals ruling that the CFPB’s funding mechanism was unconstitutional because funding does not flow through the appropriations process. The Community Financial Services Association of America had filed the original suit challenging the CFPB’s payday lending rule.

The CFPB asked the Supreme Court to overturn the Fifth Circuit ruling.

Credit union trade groups have said that the CFPB should be funded through the appropriations process and that the agency should be converted into a commission.

Several justices on Tuesday indicated that they did not agree with the CFSA’s arguments.

“Repeating an argument over and over again doesn’t make it right, and the Fifth Circuit got it wrong,” Rachel Fried, senior counsel at Democracy Forward said . “That was clear in the oral arguments today.”

Law Firm Not So Sure

While the consumer groups appeared somewhat confident that the Supreme Court would find that the CFPB’s funding scheme was fine, attorneys writing in the  “Consumer Monitor Blog” at Ballard Spahr were not so sure.

“We can sometimes predict the outcome of a Supreme Court case based on the oral argument and the tenor of the questions asked by the Justices,” the attorneys, who represent financial services clients wrote. “However particularly in light of what seemed to be restrained questioning of the Solicitor General by the conservative Justices, this case does not readily allow us to predict an outcome.”

The attorneys said that the court’s conservative justices said they were concerned about the separation of powers impact of the CFPB’s funding and that upholding the current mechanism would allow Congress to fund programs in novel ways.

At the same time, the court’s progressive justices indicated that they were “comfortable” with the agency’s current funding scheme.

The court is likely to issue a decision in the case in mid-2024.

Poll Shows Support

Meanwhile, the consumer groups continue to try to make the case that the CFPB has widespread political support. Americans for Financial Reform and the Center for Responsible Lending this week released a poll of 1,550 likely 2024 voters conducted by the bipartisan partnership of Lake Research Partners and Chesapeake Beach Consulting.

The poll found that after reading a short description of the CFPB’s duties, 82% of those responding said they supported the agency’s mission.

When asked about how the agency should be funded, 50% of those responding said funding should be provided independently of annual appropriations, 23% said Congress should provide the money, 11% said neither should and 16% said they were not sure.

The poll’s margin of error is +/-2.5%.


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