Tzedek DC and ninety other coalition member organizations from 34 states and DC filed an amicus brief urging the U.S. Supreme Court that the Consumer Financial Protection Bureau’s (CFPB) independent funding mechanism does not violate the Appropriations Clause of the U.S. Constitution. A finding against the CFPB could plunge the housing and financial markets into chaos by undermining years of consumer protections rulemaking and enforcement.

The brief, drafted by the UC Berkeley Center for Consumer Law & Economic Justice, which also organized signatories focused on state and local consumer advocacy, argues that the CFPB’s funding structure is echoed not only among other federal agencies but also, crucially, in dozens of independent state regulatory agencies across the country. Since long before Congress created the CFPB, the States (and DC) have created regulatory agencies with certain self-sustaining funding mechanisms that do not require allocation of taxpayer money.

The brief explains that the CFPB’s funding scheme, therefore, reflects an unexceptional and well-established federal and state practice to provide fiscal autonomy to particular government agencies, one not likely to conflict with either state constitutions' appropriations provisions or the U.S. Constitution’s Appropriations Clause. Because state courts often look to the U.S. Supreme Court’s decisions on the federal Constitution to interpret their own constitutions and identically worded appropriations clauses, the brief warns that a decision disapproving of the CFPB’s financial structure could prompt a seismic shift in how the States are permitted to set up and operate their own agencies.

The amicus brief is here.