The CFPB’s budget cannot exceed 12% of the Federal Reserve’s annual operating expenses. The watchdog agency has so far not requested all of the budget authorized to it in any given year, the Post reported.
However, the appeals court said the CFPB’s funding mechanism violated a constitutional mandate for congressional appropriation of money, the Post reported.
During arguments before the Supreme Court, the Biden administration maintained that while the Constitution gave Congress the authority for appropriations, it set few limits on how appropriations could be made.
The administration argued that upholding the 5th Circuit’s decision could impact the funding for other regulatory agencies, including the Federal Reserve Board, and could even result in problems for Social Security and payments on the national debt, the Post reported.
Justice Clarence Thomas authored the 7-2 decision overturning the appeals court’s ruling. Justices Neil M. Gorsuch and Samuel A. Alito Jr. dissented, saying the decision would allow the CFPB to spend practically unlimited money without congressional oversight.
