If your tyranny-alarms ring each time you discover that Massachusetts Senator Liz Warren (D) or one of her political ideas is in the news, you’re not alone. And if those alarms ring with greater urgency upon finding out that something associated with Warren just got Supreme Court license to continue running roughshod over people’s rights, you’re in good company, as well.
In a 7-2 decision, the Supreme Court of the United States (SCOTUS) ruled Thursday in “Consumer Financial Protection Bureau v. Consumer Financial Services of America, Ltd.” that the 2010 Warren brainchild (or, as Jimi Hendrix more appropriately might have said, “Voodoo Chile”) not only can continue to exist, but that the Federal Reserve being the CFPB’s funding source is constitutional.
Before we dig into the decision, and the unusual split in opinion between Clarence Thomas (who sided with the majority) and Samuel Alito (who sided with the minority and wrote a blistering rebuke of the majority decision), it’s valuable to recall some key points.
First, this is the United States of America, the government of which is supposed to operate by the wondrous US Constitution that politicians such as Warren keep attacking as a matter of course.
Second, within the U.S. Constitution, there’s this thing called the Bill of Rights, also known as the first ten Amendments to the document. Some of those Amendments come in handy here to see with great facility how obnoxious Warren’s Frankenstein creation is.
For example. The Fourth Amendment prohibits any agent of any level of government from obtaining private documents, property, or information in the form of communications, or doing any search of a person or place, without a judge-issued, public warrant citing the person to be searched and the item or items sought by the government.
The Fifth Amendment promises that no one shall be deprived of due process, a process that includes a formal charge with a crime, and a jury trial, and no level of government judicial system will put any person through double-prosecution, or double-jeopardy.
The Sixth Amendment promises a fair and speedy trial before a jury, the right to question witnesses, and the right to a publicly provided attorney for defense (some of my students properly question the assumption that government can force people to pay for someone else’s “government-provided” lawyer, but that’s a deeper political-philosophical question).
The Eighth Amendment prohibits cruel and unusual punishment.
And, beyond those, the Fourteenth Amendment reiterates the Fifth’s promise of due process.
All of which is important when studying this new SCOTUS decision, which focused solely on the funding mechanism of Warren’s frightening gang, and paid no attention to the fact that the CFPB can target vast numbers of Americans with snooping and prosecution, completely avoiding the Bill of Rights.
As Mark Sherman explains, for the Associated Press, a group of payday loan business owners (whom the CFPB was targeting with edicts and restrictions) in 2022 challenged the CFPB’s funding scheme, and in the court, things played out as one might expect.
As with almost all other government bureaus, once created, they never die. In fact, this Congressional creation doesn’t even have to answer to Congress for its money, and the SCOTUS just ruled that this is perfectly okay.
“Unlike most federal agencies, the consumer bureau does not rely on the annual budget process in Congress. Instead, it is funded directly by the Federal Reserve, with a current annual limit of around $600 million.
The federal appeals court in New Orleans, in a novel ruling, held that the funding violated the Constitution’s appropriations clause because it improperly shields the CFPB from congressional supervision.”
That’s right. All funding bills must originate in Congress, and the Congress must include what its members want to fund in their budget, which would see the Executive Branch execute, if the President and his branch employees found that the items being funded and the funds themselves comport with the U.S. Constitution.
Related: No Surprise: Sen. Warren Suddenly Dreams Up a Bill To Crush Cryptocurrency
By creating the CFPB, then allowing it to exist in perpetuity with money that the Federal Reserve can just create out of nothing, the original Warren legislation that was passed in 2010 circumvents the Congress and creates a police force that does not have to answer to the legislative branch for its annual budget.
That’s one of the big problems with the CFPB.
Writes Sherman:
Thomas reached back to the earliest days of the Constitution in his majority opinion to note that ‘the Bureau's funding mechanism fits comfortably with the First Congress' appropriations practice.’”
Which is, of course, ridiculous, and exposed as such in lower court rulings that the CFPB appealed to get it to the SCOTUS.
As Amy Howe observes for SCOTUSblog, Justices Sam Alito and Neil Gorsuch were blistering in their dissent:
“Justice Samuel Alito dissented, in an opinion joined by Justice Neil Gorsuch. He offered a dueling interpretation of history that he suggested, leads to the conclusion that the CFPB’s funding scheme ‘blatantly attempts to circumvent the Constitution.’”
Indeed, she also notes that the payday lenders saw received a ruling in their favor via the full Fifth Circuit Court of Appeals:
“(T)he court of appeals agreed with the groups that the agency’s funding structure – which was intended to foster its independence – is inconsistent with Article I, Section 9 of the Constitution, which instructs that ‘[n]o money shall be withdrawn from the Treasury, but in Consequence of Appropriations made by Law.’”
You read that right. The Treasury is supposed to supply the funds, not a central-banking cartel put into money-printing power by a 1913 move that, itself, violates the Constitution.
Adds Howe:
“In fact, the 5th Circuit concluded, the CFPB’s funding is ‘double-insulated’ from Congress’s power under the appropriations clause, because the agency not only receives its funding from the Federal Reserve, but it (rather than Congress) determines the amount of that funding, by requesting the amount that the CFPB director deems “reasonably necessary to carry out” the bureau’s duties.”
It’s all wonderfully amorphous, creates an extra-judicial and extra-legislative snooping and punishment “bureau” – and it all runs completely contrary to the constitutional Amendments noted above.
But none of that seems to matter to the majority of the Supreme Court.
Likewise, they showed no interest in the fact that the Constitution requires federal government money to be coins, not paper, not digits created by a government-started Federal Reserve that can make its own cash and send it to the CFPB to keep breaching the Bill of Rights.
So, Warren’s creation, like most government agencies, will live on, likely expand, and keep pushing around private business interests without any regard to the Constitution.
It sure is great to know the Supreme Court is so focused on the founding rules, isn’t it?
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