If the Consumer Financial Protection Bureau is going down next week following its day before the Supreme Court, then the person most associated with the formation of the Bureau is going down swinging. Sen. Elizabeth Warren [D-Mass.], who helped create the CFPB following the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2008, gave a keynote speech yesterday before a consumer advocacy organization, painting a picture of what could happen if the Supreme Court rules against the Bureau
The Supreme Court will hear arguments on Tuesday in CFPB v. Community Financial Services Association et al., that will once and for all seek to answer the question of whether the manner in which the Bureau is funded — through appropriations from the Federal Reserve and not through the Congressional appropriations process — is constitutional or not. Ruling that the manner is not constitutional could rain down a chaos the likes of which this industry has never seen before. One person who definitely doesn’t want that to happen is Sen. Warren.
“The CFPB is not up for sale,” she said, according to a copy of her prepared remarks. “It will not be broken up and sold for parts as some sort of compromise. Not on my watch.”
For Warren, while she acknowledges that the future of the CFPB is at stake, to her, the Supreme Court’s decision is actually bigger than that. The future of every banking regulator is up for grabs, she said. More than that, she noted in her speech, Social Security and Medicare are also funded outside of the Congressional appropriations process. What’s to happen to those programs if the Supreme Court issues a ruling denouncing the funding structure as unconstitutional, she asked.
“And if the Supreme Court opens the door, the independence of the Fed, the FDIC, and others that use a funding model like the CFPB will evaporate,” Sen. Warren said. “Instead of regulators that watch out for the safety and soundness of our economy, we’ll have regulators who bow to the wishes of the most politically connected financial institutions.
The CFPB is under attack because it is good at what it does—and the American people support it. The Biden administration has made the CFPB even better, ramping up efforts to protect consumers, curbing predatory practices, and leveling the playing field for the majority of businesses that want to play by the rules.”
Read a full copy of her remarks by clicking here.
