CFPB Director Chopra Says Agency “Will Be Firing on All Cylinders” after SCOTUS Ruling

May 22, 2024Federal Regulation, News

After years of uncertainty regarding the Consumer Financial Protection Bureau (CFPB)’s legal status as a pending lawsuit made its way through the legal system, the Supreme Court’s recent ruling that the agency’s funding mechanism is in fact constitutional appears to have put the matter to rest for the foreseeable future. The CFPB announced afterwards that it will increase its enforcement office by nearly 40 percent, continue to pursue more than a dozen court cases and legal actions that were halted by the litigation, and work on new regulations for credit markets.

“Yesterday, the Supreme Court rejected a radical theory that would have rattled financial markets by injecting uncertainty into all of the CFPB’s actions taken since day one,” said CFPB Director Rohit Chopra in prepared remarks. “The Court’s ruling makes clear the CFPB is here to stay.”

In a 7-2 decision, the Supreme Court rejected the argument by payday lenders that the Bureau’s exclusion from the annual budget process violated the Constitutional clause about federal money appropriations. According to Politico, the case caused a potential threat to not only the CFPB, but also to other agencies that don’t draw money from the congressional appropriations process, like the Federal Reserve.

Financial industry groups were divided over the court’s decision, as mortgage bankers warned that a decision in favor of the plaintiffs could cast doubt on existing regulations and negatively impact their market. But the court’s decision will allow the CFPB to hire 75 additional staff members: attorneys, economists, investigators, and paralegals.

The CFPB will also pursue several matters that were stalled while the Supreme Court case was still pending. Additionally, Chopra hinted at new regulations in the future. “Expect to see more work when it comes to credit reports and credit scores,” he said. 

The Bureau issued a statement regarding the decision, concluding that the “ruling upholds the fact that the CFPB’s funding structure is not novel or unusual, but in fact an essential part of the nation’s financial regulatory system, providing stability and continuity for the agencies and the system as a whole.”

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