Washington, D.C. — In response to a decision by the United States Court of Appeals for the Second Circuit affirming the constitutionality of the Consumer Financial Protection Bureau’s independent funding through the Federal Reserve, the American Economic Liberties Project released the following statement.

“Today’s Second Circuit decision, written by a Trump appointee, emphatically dismisses the baseless attacks on the CFPB’s constitutionality being made by debt collectors, payday lenders, and other predatory financial players,” said Morgan Harper, Director of Policy & Advocacy at the American Economic Liberties Project. “This decision firmly rejects the Fifth Circuit’s decision currently before the Supreme Court. The Supreme Court must do the same in CFPB v. Community Financial Services, and allow the CFPB to focus on its job: protecting Americans from financial harm.”

With the passage of the Consumer Financial Protection Act in the wake of the 2008 financial crisis, Congress established the CFPB, to protect Americans from abuse in the consumer financial industry, expressly authorizing the agency to draw its budget from the Federal Reserve System.

In 2022, the Fifth Circuit Court of Appeals struck down a CFPB rule protecting borrowers from abusive payday lenders, citing its unconstitutional funding structure, a structure it shares with the Federal Reserve and numerous other federal agencies. If not overturned by the Supreme Court, the ruling would sow chaos in financial markets and void countless actions taken by the CFPB to fight wrongdoing by powerful corporate giants like big banks, credit card firms, and credit reporting companies, which have so far resulted in nearly $15 billion returned to Americans.

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