Former President Barack Obama thought his legacy was untouchable. He was flat-out wrong.
Because the Supreme Court has a surprise for Barack Obama with earth-shattering consequences.
Back in 2011, the Barack Obama administration announced that they would be overseeing the formation of a new federal agency called the Consumer Financial Protection Bureau which was designed primarily to ensure that Americans aren’t being taken advantage of by banks and financial institutions.
Now, that’s all fine and dandy, but there have been growing concerns that the CFPB is abusing its power to institute strict and unfair regulations on small businesses.
And now the CFPB’s legal status is coming into question and the Supreme Court will have to weigh in on whether the CFPB as its currently operating is unconstitutional. This would be a major blow to the Barack Obama legacy.
This week, the Supreme Court will hear oral arguments in a case that aims to effectively shut down the Consumer Financial Protection Bureau by challenging its funding structure.
The Consumer Financial Protection Bureau (CFPB) was established in response to the 2008 financial crisis in order to enforce consumer finance laws and safeguard customers against abusive practices by financial institutions. Elizabeth Warren (D-MA), who is widely regarded as the agency’s creative force, has been raising concerns about the hearings.
A “bad decision by the Supreme Court could wreck the financial security of millions of families and turn our economy upside down,” the Massachusetts Democrat claimed Thursday at an event hosted by the Center for American Progress in Washington, D.C.
A finding against the CFPB’s funding method, as Warren and other Democrats who support the Biden administration’s defense of the agency have argued, may put the agency’s future activities in jeopardy and may also call into question the regulations it developed in the 13 years since its inception.
Since most federal agencies receive funds from Congress, major players in the payday loan sector have filed a lawsuit against the Consumer Financial Protection Bureau (CFPB), claiming that this funding mechanism violates the Constitution.
One of the nation’s most conservative appellate courts, the 5th Circuit Court of Appeals, determined last year that the Consumer Financial Protection Bureau’s funding system violates the Constitution.
Some small business advocacy groups support the notion that the CFPB’s funding system violates the appropriations clause of the Constitution because it is not part of the annual appropriations process in Congress.
Beth Milito, executive director of the National Federation of Independent Business’ Small Business Legal Center, said, “Small businesses are at risk of costly penalties and burdensome inspections” because “the CFPB is funded without Congressional oversight through the appropriations process, which is unconstitutional.”
The Supreme Court is back in session this week, hearing a handful of incredibly important cases.
But there’s one in particular that’s flown under the radar and could have devastating consequences:
CFPB v. Community Financial Services Association of America 🧵
— Robert Reich (@RBReich) October 3, 2023
For many Americans, the CFPB is a prime example of a federal agency that has overstayed its welcome since its formation back in July of 2011 in the midst of a financial crisis that was impacting millions of Americans.
Since then, the CFPB’s budget has swelled up to $600 million every single year all paid for by the U.S. taxpayers.
Conservative Republicans in Congress are calling for more accountability and checks and balances on the part of the CFPB, particularly in regards to its funding that has recently been ruled unconstitutional by an appellate court.
U.S. Senator Katie Britt (R-AL) says that Congress should be setting the budgets for an agency like the CFPB, not the federal reserve.
The CFPB needs to be accountable to the American people and have their funding set by Congress. That’s why I was proud to join a group of colleagues from both the House and the Senate on an Amicus Brief in this critical case before the Supreme Court today.https://t.co/DCmcDfQ799
— Senator Katie Boyd Britt (@SenKatieBritt) October 3, 2023
This is one of the last main points of the Barack Obama legacy and it may very well be in jeopardy when the Supreme Court Justices have to rule on the current constitutionality of the CFPB.
Stay tuned to the DC Daily Journal for more.