By Olivia Rae Okun-Dubitsky, FTC intern
The Supreme Court heard a case Tuesday that may well determine whether the Consumer Financial Protection Bureau is constitutional, a decision that could be felt across many government agencies.
The respondents, two trade groups, argue that the CFPB cannot receive funds through the Federal Reserve due to the Constitution’s Appropriations Clause, which states, “No money shall be drawn from the Treasury, but in consequence of appropriations made by law.”
Counsel for the CFPB, U.S. Solicitor General Elizabeth Prelogar, focused her argument on the longstanding history of funding financial institutions through fines and fees and not necessarily through direct appropriations.
Prelogar also argued that finding the CFPB to be unconstitutional “would have sweeping consequences because today, over 60 percent of the federal budget comes in the form of these kinds of standing appropriations that exist in every sector of the federal government.”
One example of this in the judiciary is PACER, the pay-to-see-court-documents database. If the Court finds in favor of the respondent, PACER could lose its funding source, which could potentially lead to chaos — and even less access to public records.
While we can’t say how the justices will swing, they largely met the respondents’ argument with disdain. Justice Kagan stated “You’re just flying in the face of 250 years of history.” Justice Sotomayor hit them with: “I’m sorry. I’m trying to understand your argument, and I’m at a total loss.”
Conservative justices also pushed back, with Justices Kavanaugh and Barrett casting doubt on the respondents’ argument on Congress’ historic role in how it handles funding for certain agencies and subagencies.
The trade groups hope that “separating the sword from the purse” will “protect individual liberty,” as counsel Noel Francisco put it.
But following the Constitution and statutes – by finding in favor of the CFPB — seems like a more certain way to achieve that aim.