CFPB Funding Structure Under Fire in Payday Lending Rule Appeal

A federal appeals court appears poised to void the Consumer Financial Protection Bureau’s funding structure, in a ruling that would throw a fresh shadow across the beleaguered agency’s work.

The bureau is funded through the Federal Reserve System, not via a direct congressional appropriation. The constitutionality of that arrangement is a question in several court cases across the country.

A US Court of Appeals for the Fifth Circuit panel, which is weighing a challenge to the CFPB’s payday lending rule, has signaled it’s skeptical of the funding model. A ruling against the CFPB’s funding mechanism would set up a fight ...