Democratic Massachusetts Sen. Elizabeth Warren warned Thursday that a “bad decision” by the Supreme Court in a coming case could undo the financial regulator she helped create.
The Supreme Court will hear a case Tuesday considering the constitutionality of the Consumer Financial Protection Bureau’s (CFPB) funding mechanism. Warren, who came up with the idea for the agency following the 2007-2008 financial crisis, suggested at a Center for American Progress event that the Supreme Court’s ruling could jeopardize Social Security and Medicare, along with other banking regulators like the other the Federal Deposit Insurance Corporation, which are likewise funded outside of annual Congressional appropriations.
“A few years ago, the then-Supreme Court would have refused even to hear a case as ridiculous as this one,” Warren said. “But we have a very different court now, and the stakes are much higher.”
“A bad decision in the Supreme Court could wreck the financial security of millions of families and turn our economy upside down,” Warren said. (RELATED: Supreme Court To Decide Fate Of Key Financial Regulator: ‘Constitutional Defects’)
.@CFPB’s future is at stake—along with the future of other banking regulators. I’m giving a speech on how a bad Supreme Court decision could wreck Americans’ financial security, turn our economy upside down & why we must fight to protect this agency: https://t.co/0fF598gVTO
— Elizabeth Warren (@SenWarren) September 28, 2023
The Fifth Circuit found in October 2022 that funding the CFPB through the Federal Reserve violates the Constitution’s Appropriations Clause.
“We agree that, for the most part, the Plaintiffs’ claims miss their mark,” Judge Cory T. Wilson wrote in the 5th Circuit opinion. “But one arrow has found its target: Congress’s decision to abdicate its appropriations power under the Constitution, i.e., to cede its power of the purse to the Bureau, violates the Constitution’s structural separation of powers.”
Jessica Thompson, an attorney at Pacific Legal Foundation, told the Daily Caller News Foundation in February that the CFPB is “shot through with constitutional defects.”
“CFPB’s exemption from the appropriations process has been lurking in the shadows since the creation of the Bureau,” Thompson said.
Warren said the CFPB is under attack “because it’s good at what it does.”
“For MAGA Republican lawmakers, pain is the point. Chaos is the point. Government that cannot work for the people is the point,” she said.
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