The Supreme Court said Monday it will take up a Republican-led challenge to the Consumer Financial Protection Bureau, a case that could threaten how the consumer watchdog agency functions. It is the second time in three years that the justices will be examining the federal agency, which was created in the wake of the 2008 financial crisis.
The case will not be heard before October. That's when the court begins its next term.
Late last year, a federal appeals court — the U.S. Court of Appeals for the 5th Circuit — ruled that the agency’s funding structure is unconstitutional, threatening its ability to function. The Biden administration asked the high court to review that decision, which it has now agreed to do.
The administration said the lower court’s ruling “calls into question virtually every action the CFPB has taken” since its creation. The decision “threatens to inflict immense legal and practical harms on the CFPB, consumers, and the nation’s financial sector,” the administration said.
Since the bureau was created more than a decade ago by the Dodd-Frank Act, it has varied in its aggressiveness. During the Obama administration, it used its muscle to collect fines from banks and credit card companies; during the Trump administration, it drastically scaled back enforcement actions. Republicans have argued that the agency has unchecked power.
The case the justices agreed to hear centers on the agency's funding. Unlike a majority of agencies, the CFPB does not get its funding from the annual budget process in Congress. Instead, it is funded directly by the Federal Reserve. The agency’s budget is capped at 12% of the total operating expenses of the Federal Reserve System. In the 2022 fiscal year, the agency received about $640 million.
The case the justices will hear began when two associations sued over the agency's Payday Lending Rule. They argued in part that the agency's funding structure violated the Constitution, improperly insulating the agency from congressional supervision. A trial court ruled against the associations, but the appeals court agreed the funding structure was unconstitutional. Other courts that had previously looked at the agency's funding structure found no issue.
In urging the justices to take the case, a group of 16 mostly Republican-led states called the CFPB “a failed experiment in administrative governance.”
Just three years ago, in 2020, the high court dealt with a different challenge to the agency. That case involved the agency's structure. The justices ultimately ruled that Congress had improperly insulated the head of the bureau from removal. The justices said the agency could continue to operate but that its director had to be removable by the president at will.
The CFPB was the brainchild of Sen. Elizabeth Warren of Massachusetts and former Democratic presidential candidate.
2021 saw markets continue to be impacted by the onslaught of the coronavirus pandemic -most recently in the form of the Omicron variant- in addition to the global supply chain shortage, and increased inflation. But it wasn't all bad news, as crypto soared throughout the year, and meme stocks continued to have a moment. With the year coming to a close, investors are keeping an eye out to see if they should expect more of the same in the new year. Chris Vecchio, Senior Analyst, at DailyFX tells us what market trends to be on the watch for in 2022.
Matt Hayden, vice president of govtech solutions at Exiger and a former assistant secretary of cyber at Department of Homeland Security, joined Cheddar to discuss the surprise phone call initiated by Russian President Vladimir Putin to President Joe Biden, ahead of January security talks about the rising tensions over Ukraine. "We're hoping to hear that we're able to talk about the aggression and the leadup of the Ukrainian militarization," Hayden said. "But we're also looking to hear is how the Kremlin leveraged their talking points to try to test their negotiation stance with the United States leading into this January 10th meeting."
The No Surprises Act begins implementation on January 1, 2022. The legislation is meant to curb the practice of unexpected billing for care from providers the patient was unaware were out-of-network from their insurance. Patricia Kelmar, director of health care campaigns for U.S. PIRG joined Cheddar to describe the hundreds, sometimes thousands, of dollars charged to unsuspecting patients and how things will change under the new law. "If we are picking an in-network doctor and an in-network hospital, we should not see those added costs from anesthesiologists, radiologists, scrub-in surgeons," she said. "The other area it protects you is in air ambulances — not ground ambulances, unfortunately — but the helicopters or the airplanes you might need to transport you in an emergency situation."
President Joe Biden and Russian President Vladmir Putin are expected to have another conversation surrounding escalating tensions between Russia and Ukraine. Ariel Cohen, senior fellow at the Atlantic Council, joined Cheddar's Ken Buffa to discuss the ongoing tensions and why Putin's request for a conversation with Biden comes now. "This is very serious. This is the worst security crisis we had since the collapse of the Soviet Union," Cohen told Cheddar.
Stocks closed mixed on Wednesday, but two indexes - the Dow and the S&P 500 - ended the session with a new record. Akshata Bailkeri, Equity Analyst at Bruderman Asset Management, joins Cheddar News' Closing Bell, where she says there is a consensus for robust consumer spreading in 2022, especially as the Omicron variant is proving to be milder than other COVID-19 strains.
