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.
President Joe Biden said Tuesday that the U.S. will begin to impose sanctions on Russia, calling recent troop movement into Ukraine an 'invasion.' Biden and other government officials including from the State Department have begun to classify the Russian troop movement as an invasion after Russian President Vladimir Putin ordered troops to two independent Ukrainian areas in an alleged "peacekeeping" mission — which the West considers an act of aggression. Biden said Russia will continue to pay 'an even steeper price' if it continues sending troops into Ukraine. What happens next? Will Putin find a way around these sanctions? Ariel Cohen, senior fellow at the Atlantic Council, joins Closing Bell to discuss Biden's remarks, how the West will protect Ukraine since it doesn't belong to NATO, and more.
Russian lawmakers have given President Vladimir Putin a military force authorization in Ukraine, and President Biden has described Putin's announcement declaring the independence of two provinces within Ukraine and his subsequent deployment of peacekeepers as tantamount to "invasion. David Tafuri, a former Obama campaign foreign policy advisor and Bush State Department official, joined Cheddar News to discuss. "The Ukrainian military occupies more than 70 percent of those provinces still," Tafuri said, noting Putin alleged having a responsibility to defend those regions. "This would put Ukrainian forces and Russian forces right at each other engaged. And that might be how the war starts."
The major indexes ended Tuesday's session sharply lower due to escalating tensions between Russia and Ukraine. Bill Stone, Chief Investment Officer at The Glenview Trust Company, joins Cheddar News' Closing Bell, where he reminds viewers that Wall Street doesn't like uncertainty, and more of the recent losses are due to geopolitics than inflation.
Karim Hijazi, CEO of Prevailion, joins Cheddar News' Closing Bell, where he says that crypto's decentralized nature will pose obstacles for the FBI's new crypto unit, but it will also make progress with items such as managing fraudulent exchanges.
The Retail Industry Leaders Association released a report alleging the safety risks, economic losses, and potential job losses they link to a surge in shoplifting crimes in the United States. Lisa LaBruno, senior EVP of retail operations at the trade organization, joined Cheddar News to discuss the impact of websites that allow for the resale of unverified goods and passing the INFORM Consumers Act to stamp it out. “We need to hold the online marketplaces accountable for being a favored venue for criminals to resell stolen product," LaBruno said. "And that is exactly what the INFORM Act is designed to do."
The East-West faceoff over Ukraine has escalated dramatically, with Russian lawmakers authorizing President Vladimir Putin to use military force outside his country and President Biden and European leaders responding by slapping sanctions on Russian oligarchs and banks.
Stocks closed broadly lower Tuesday after Russia sent forces into Ukraine’s eastern region and the U.S., European Union and U.K. responded with economic sanctions.
