Welcome to Supreme Court Opinions. In this episode, you’ll hear the Court’s opinion in Consumer Financial Protection Bureau v Community Financial Services Assn. of America, Ltd.
In this case, the court considered this issue: Does the funding scheme for the Consumer Financial Protection Bureau, which receives funding directly from the Federal Reserve, violate the Appropriations Clause of the Constitution?
The case was decided on May 16, 2024.
The Supreme Court held that the funding scheme for the Consumer Financial Protection Bureau satisfies the Appropriations Clause. Justice Clarence Thomas authored the 7-2 majority opinion of the Court.
The Appropriations Clause provides that “no Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” Article I, §9, cl. 7—in other words, government spending must be authorized by an act of Congress. Historically, the word “appropriation” requires identifying a source of public funds and authorizing the expenditure of those funds for designated purposes. The practices of the English Parliament after the Glorious Revolution, the American Colonies, early state legislatures, and the First Congress varied widely in their specificity, duration, and structure, but all met these basic requirements.
The statute authorizing the CFPB’s funding likewise contains the necessary elements of a valid appropriation under the Appropriations Clause. It identifies a source of funds (the combined earnings of the Federal Reserve System), sets a maximum amount that can be drawn, and specifies the purpose for which the funds can be used (to pay the CFPB’s expenses in carrying out its duties). Furthermore, the CFPB’s funding mechanism is analogous to some of the broad, open-ended appropriations passed by the First Congress. Therefore, the CFPB's funding statute satisfies the requirements of the Appropriations Clause.
Justice Elena Kagan authored a concurring opinion, in which Justices Sonia Sotomayor, Brett Kavanaugh, and Amy Coney Barrett joined, noting that CFPB’s funding scheme would have been acceptable not only in the late-18th century, but also any other time in our Nation’s history.
Justice Ketanji Brown Jackson authored a concurring opinion, endorsing judicial restraint. She pointed out that “when the Constitution’s text does not provide a limit to a coordinate branch’s power,” courts “should not lightly assume that Article III implicitly directs the Judiciary to find one.”
Justice Samuel Alito authored a dissenting opinion, in which Justice Neil Gorsuch joined, arguing that the Appropriations Clause imposes more stringent obligations on Congress to monitor and control the expenditure of public funds and the projects they finance.
The opinion is presented here in its entirety, but with citations omitted. If you appreciate this episode, please subscribe. Thank you.
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