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.
Zachary Petrizzo, media reporter at The Daily Beast, joins Cheddar Politics to discuss former President Trump's endorsement of Dr. Oz in the U.S. Senate race in Pennsylvania, and why some parts of the MAGA base are unhappy about it.
Larry Sharpe, libertarian candidate for New York governor, joins Cheddar Politics to talk about the issues motivating his campaign. The discusses his endorsement from the progressive Forward party founded by former presidential candidate Andrew Yang, and changes that can be made to voting systems.
Cheddar Politics breaks down the seismic shift in White House rhetoric surrounding Russia's war on Ukraine. President Biden began calling the alleged war crimes committed by Russian soldiers in the Kyiv region "genocide." Foreign policy and national security analyst A. Ari Aramesh joins Cheddar News to discuss what constitutes genocide and whether the developments in Ukraine qualify.
President Joe Biden said he is considering forgiving some federal student debt, a step that would help him fulfill a campaign promise and provide relief to borrowers who took out thousands of dollars in loans to finance their higher education.
Catching you up on what you need to know on April 28, 2022, with Elon Musk mocking Twitter's top legal exec Vijaya Gadde on the platform itself, a probe in George Floyd's death finding discrimination within the Minneapolis police force, the latest California drought leading to new water restrictions, and more.
Tech giant Microsoft won a military contract for the production of its IVAS (integrated visual augmentation system) combat goggles, based on its HoloLens ARG tech, worth up to $21.9 billion over 10 years. However, the Pentagon is now saying that the device "has not yet demonstrated the capability to serve as a fighting goggle," and that the Army made mistakes in the program's initial stages by not clearly describing minimum performance standards. While testing continues, concerns have grown outside of the Defense Department to Congress and even within Microsoft itself. Cheddar's Ken Buffa takes a deeper look at the possible boondoggle.
U.S. stocks fell sharply to close Tuesday's session, with the Nasdaq dropping 3.95% and hitting a new one-year low. Frances Newton Stacy, Director of Strategy for Optimal Capital, joins Cheddar News to discuss her reaction to how markets closed the session, and to break down Q3 2022 earnings from Microsoft. "Netflix was sort of the big warning, and I think Big Tech was down today in anticipation of these earnings," she says.
Florida Governor Ron DeSantis has signed into law a bill that strips Disney World of its special self-governing status. This came after Disney spoke out against Florida's so-called “Don’t Say Gay” bill, some saying in retaliation of that. Ben Means, Professor of Law and the John T. Campbell Chair in Business and Professional Ethics at the University of South Carolina School of Law, breaks down how the new law might impact Disney’s business moving forward.
