The Supreme Court upheld a funding scheme apparently meant to insulate a powerful federal agency from future congressional oversight.
The Supreme Court upheld a funding scheme apparently meant to insulate a powerful federal agency from future congressional oversight.
The court ruled 7-2 that the funding scheme for the Consumer Financial Protection Bureau does not violate the Constitution’s appropriations clause, which forbids the executive branch from taking money from the federal Treasury except “in consequence of appropriations made by law.”
“Under the appropriations clause, an appropriation is simply a law that authorizes expenditures from a specified source of public money for designated purposes,” Justice Clarence Thomas, an appointee of President George H.W. Bush, wrote in the majority opinion. “The statute that provides the bureau’s funding meets these requirements. We therefore conclude that the Bureau’s funding mechanism does not violate the appropriations clause.”
Congress created the Consumer Financial Protection Bureau in the Dodd-Frank Wall Street Reform and Consumer Protection Act, passed in response to the 2008 financial crisis. Unlike most federal agencies, the bureau does not have to petition Congress for funding annually, because Congress authorized the bureau to draw funds from the Federal Reserve System. This insulates the bureau from a normal process that allows Congress to check the administrative agencies under the executive branch by refusing to fund them.
Thomas wrote the opinion, in which Chief Justice John Roberts and Justices Sonia Sotomayor, Elena Kagan, Brett Kavanaugh, Amy Coney Barrett, and Ketanji Brown Jackson joined. Only Justices Samuel Alito and Neil Gorsuch dissented.
