Consumer Financial Protection Board is Unconstitutional, Says NELF in US Supreme Court Brief

BOSTON – The New England Legal Foundation (“NELF”) has filed an amicus friend-of-court brief in the United States Supreme Court urging the Court to overturn the funding mechanism of the powerful federal agency proposed and established by Massachusetts Senator Elizabeth Warren: the Consumer Financial Protection Board (“CFPB”).

 NELF argues that the history, text and structure of the U.S. Constitution’s Appropriations Clause demonstrate that it is designed to act as a firewall to the accumulation of unchecked power within the Executive Branch.  Hence, the extent of powers that the CFPB wields is a relevant factor in assessing whether its unique self-funding is consistent with the Appropriations Clause.  The greater and more varied its powers, the more important a strict observance of the Clause becomes.

 Here, the CFPB’s powers are uniquely extensive; the CFPB enjoys powers dispersed previously among several other agencies.  It has quasi-legislative rulemaking power, executive enforcement power, and quasi-judicial power over administrative proceedings, all exercised over a tremendously varied range of economic activities.  In light of such powers, as well as its unique funding mechanism, congressional oversight falls far short of safeguarding adequately against Executive Branch violations of the separation of powers.  NELF therefore urges the Court to rule that the CFPB’s self-funding scheme is unconstitutional.

 “Our nation was founded in rebellion to a King, so our constitutional fabric is woven to protect all citizens from an Executive branch that concentrates power and evades public accountability through our elected representatives,” said Dan Winslow, NELF President. “NELF’s mission includes advocacy for the rule of law,” noted Winslow, “and we are hopeful the Court will agree and require this federal agency’s funding to be subject to congressional oversight.”

 NELF’s brief was authored by Weil Gotshal’s Mark Perry, Josh Wesneski, and Mark I. Pinkert. In a statement prepared by Weil, the firm said “We are proud to have worked with NELF on raising these fundamental issues of separation of powers with the Court.  It is important that the Court understand the extent to which the agency’s funding structure has shifted the constitutional balance of powers.”

The Court is expected to hear arguments on the case this Autumn.