Supreme Court Decision Upholding CFPB Funding Mechanism Raises Questions About Future of Federal Agency Powers
Supreme Court Upholds CFPB Funding Mechanism, Future of Federal Agency Powers Uncertain
In a landmark decision on Thursday, the Supreme Court ruled in a 7-2 decision to uphold the funding mechanism of the Consumer Financial Protection Bureau (CFPB), drawing money from the Federal Reserve instead of Congress. This decision has been hailed as a victory for supporters of robust federal regulation, particularly under President Joe Biden’s administration.
However, despite this victory, concerns remain about the future of federal agency powers, given the conservative majority on the court. The term “war on the administrative state” refers to conservative efforts to weaken federal agencies that regulate various aspects of American business and life, and the court’s alignment with this effort has raised red flags among some legal experts.
Pending cases involving agencies such as the Securities and Exchange Commission (SEC), National Marine Fisheries Service (NMFS), and Environmental Protection Agency (EPA) could significantly curtail federal agency powers. The SEC case questions the legality of proceedings conducted by the agency’s in-house judges, while the NMFS case challenges a government-run program to monitor overfishing off New England’s coast. Additionally, the EPA-related case involves a challenge to a regulation aimed at reducing ozone emissions.
While the CFPB ruling is a positive step for federal regulation, legal experts caution that it does not necessarily predict the court’s stance in other cases. House Financial Services Committee Chairman Patrick McHenry has urged the House to take up the CFPB Transparency and Accountability Reform Act to ensure accountability to the American people through their elected representatives.
As the future of federal agency powers hangs in the balance, the outcome of these pending cases will have far-reaching implications for the regulatory landscape in the United States.
