What’s Next for CFPB Funding After Appellate Ruling: Explained

The Consumer Financial Protection Bureau faces yet another existential fight after the Fifth Circuit found its funding mechanism to be unconstitutional.

In its Oct. 19 ruling, the U.S. Court of Appeals for the Fifth Circuit said that the CFPB’s independent funding through the Federal Reserve was unique among federal financial regulators and other agencies. The funding mechanism allows the CFPB to be “double-insulated” from Congressional oversight, the appeals court said.

Just two years ago, the CFPB survived a trip to the US Supreme Court over a challenge to the constitutionality of its single-director leadership structure. The agency could face another ...