In an enlightening recent development, consumers and financial services businesses have benefitted from the US Supreme Court’s decision to uphold the legality of the Consumer Financial Protection Bureau (CFPB). The CFPB, now 13 years old, faced a challenge from a trade association representing payday lenders based on the Bureau’s extramural funding mechanism, which operates independently of the annual congressional appropriations process. The court’s reassertion works in favour of CFPB’s continued regulation of consumer credit, payment, and financial data markets, attesting to the Bureau’s pivotal role as a consumer rights defender.
Significantly, the CFPB has already accomplished substantial restitution for consumers, recuperating $19 billion since 2011. More importantly, the CFPB’s ordinances and enforcement actions are expected to save consumers even more in the near future.
The court’s decision also secures a valuable win for financial services businesses. The CFPB propounds crucial legal foundation on which virtually all consumer financial services markets rely: a sound and efficient regulatory infrastructure analogous to a municipal transportation department ensuring functional traffic lights and road signs. Absence of this regulatory assistance would be detrimental to financial service providers, leading to extensive risk and liability.
The court’s decision concludes a decade of attacks on the CFPB’s constitutionality, solidifying the Bureau’s role in the industry. This hard-won stability will safeguard the legal infrastructure, leaving the CFPB far from lacking accountability. It retains the capacity to challenge and dispute particular regulations and enforcement actions, maintaining an essential balance within our system of government.
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