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Justices with the U.S. Supreme Court will begin hearing oral arguments on Oct. 3 concerning the case raised by payday lenders that Congress violated the Constitution when it passed the 2010 law that created independent funding for the CFPB.
Last October, 5th U.S. Circuit Court ruled that the CFPB's funding structure is "uniquely unconstitutional" in that the bureau receives its funding through the Federal Reserve instead of the congressional appropriations process other federal agencies are required to adhere to.
During a call Monday morning, NAFCU Vice President of Regulatory Affairs Ann Petros said, "It looks like the Supreme Court is eager to hear this case and that could mean that we could see a decision earlier in 2024. But, of course, that could go up until the end of June in 2024 before we have a decision in the case."
Ann Petros Earlier in June, NAFCU and CUNA filed a joint brief with the Supreme Court which supported the payday lenders' argument to force Congress to abandon the CFPB's independent funding structure. Similarly, the U.S. Chamber of Commerce and the American Bankers Association filed friend-of-the-court briefs.
In those briefs, the organizations asked the Court to allow Congress a limited time to enact a new law that would fix the constitutional deficiencies they see. The CUNA-NAFCU brief recommended three to six months.
CUNA has long supported placing the CFPB under the traditional appropriations process. NAFCU has long held that credit unions should be exempt from CFPB jurisdiction and instead be regulated solely by the NCUA.
The CFPB was created in 2010 to enforce provisions of the Dodd-Frank Act, which Congress passed to prevent abuses that contributed to the financial meltdown in 2007 that led to the Great Recession.
Of note, Congress also established independent funding for other federal agencies, including the FDIC, NCUA and Federal Reserve.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
