This article is the first in a three-part series addressing a seminal Fifth Circuit case that is now pending before the U.S. Supreme Court. Each week, we will debunk each myth and address the implications for consumer finance regulation going forward.

Myth No. 1: CFSA’s matter presents a novel attack on the Bureau’s constitutionality


As many readers are aware, the plaintiffs in Consumer Financial Services Association of America, Ltd, et al. v. Consumer Financial Protection Bureau et al. challenged the Consumer Financial Protection Bureau’s (“CFPB or Bureau”) new regulation concerning the payday loan industry. In federal court in Texas, the plaintiff also had asserted that the Bureau’s funding mechanism was unconstitutional, but it lost this argument. On appeal last fall however, the U.S. Court of Appeals for the Fifth Circuit reversed, concluding that legislative appropriations are required before the agency’s expenditure. The Fifth Circuit held that because the Bureau’s budgets are not subject to appropriations, its funding mechanism violated the Appropriations Clause of the Constitution. The case is pending before the U.S. Supreme Court and oral argument is now set for October 3, 2023.Continue Reading Three myths surrounding the Consumer Financial Protection Bureau’s plight for constitutional legitimacy