(Q) Who was the real winner in yesterday's SCOTUS decision in Consumer Financial Protection Bureau v. Community Financial Services Association of America Ltd.? (A) The rule of law and the legitimacy of the courts. In an age where there appears to be growing divisions and animosity between conservatives and liberals, Democrats and Republicans, the Left and the Right, and the core institutions at the heart of the American experiment--the executive, legislative, and judicial branches--are under attack as being no longer legitimate, us lawyers have something of an obligation to defend the legitimacy of these institutions. Especially the legitimacy of the courts, which form the basis for the very legitimacy of our profession. CFPB v. CFSAA provides lawyers an opportunity to defend the integrity of SCOTUS. Notably, Justice Thomas, writing for 7 Justices, wrote the majority opinion upholding the constitutionality of the mechanism by which the CFPB is funded. Not surprisingly, he offered an originalist justification for upholding the funding. Justice Alito, joined by Justice Gorsuch, dissented. His grounds for believing the funding mechanism to be unconstitutional? Not surprisingly, an originalist review of historical practice. Far from offering proof of the illegitimacy of SCOTUS, I believe that this case reveals the validity of the courts, the importance of reasoned and disciplined debate, and the reality that the law is often not black and white. Regardless of which side of the political aisle you walk on, this decision should be celebrated.
Jeffrey Wald’s Post
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In a highly anticipated ruling, the U.S. Supreme Court has rejected the claim brought by the Community Financial Services Association of America Ltd. against the Consumer Financial Protection Bureau. The 7:2 decision upheld the CFPB's funding structure, dismissing the argument that it violates the Constitution’s Appropriations Clause by drawing money directly from the Federal Reserve’s proceeds. This decision is poised to prompt varied reactions from legal experts. While it provides greater certainty that past actions of the CFPB will stand, it also introduces a new level of stability and potential regulatory clarity moving forward. https://lnkd.in/eU4rxdJP
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This is a very unfortunate and wrong decision by the Supreme Court today (5/16/2024) in a 7-2 decision upholding the constitutionality of the funding mechanism for the Consumer Financial Protection Bureau (CFPB). Created under the Dodd-Frank Act of 2010, the Democrats in charge of drafting Dodd-Frank deliberately contrived a unique way for the CFPB to be funded by the Federal Reserve in order to avoid being funded by appropriation from the House of Representatives as stipulated in Article I, Section 9 of the US Constitution. I'm shocked that Clarence Thomas voted in favor of the CFPB in this case. The only two justices who voted in opposition were Samuel Alito and Neil Gorsuch. This wrong decision only helps to continue the unconstitutional powers of the administrative state. The Wall Street Journal editorial board agrees with Alito and Gorsuch as stated below: "Justice Samuel Alito writes in a potent dissent joined by Justice Neil Gorsuch that also draws on history. The Constitution’s appropriations clause, Justice Alito notes, was intended to prevent the President from circumventing Congress, as the Crown often did with Parliament. "Justice Alito stresses that the CFPB boasts a combination of legislative and enforcement power, unlike the early Post Office and other historical analogies cited by the majority. “In the last several months alone, the Bureau has announced plans to effectuate not one, but three major changes in consumer protection law,” he notes. “These may or may not be wise policies, but Congress did not specifically authorize any of them, and if the CFPB’s financing scheme is sustained, Congress cannot control or monitor the CFPB’s use of funds to implement such changes,” the Justice writes. “It is not an exaggeration to say that the CFPB enjoys a degree of financial autonomy that a Stuart king would envy.” "We agree. The majority’s ruling will encourage partisans to contrive new ways to insulate agencies from Congressional control. Don’t be surprised if the Justices have to clean up after this case in the years ahead." #supremecourt #cfpb #doddfrank #finreg #administrativestate #federalgovernment #constitution #separationofpowers #law #usa https://lnkd.in/egAxqhhe
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Supreme Court issued three opinions today, one of which Donald Patrick Eckler and I planned to cover on the Podium and Panel Podcast: 1. Smith v. Spizzirri- Sotomayor, unanimous- "When a district court finds that a lawsuit involves an arbitrable dispute and a party has requested a stay of the court proceeding pending arbitration, §3 compels the court to issue a stay, and the court lacks discretion to dismiss the suit. Statutory text, structure, and purpose all point to this conclusion. The plain text of §3 requires a court to stay the proceeding upon request. The statute’s use of the word “shall” “creates an obligation impervious to judicial discretion.” 2. Consumer Financial Protection Bureau v. Community Financial Services Assn. of America, Ltd.- THOMAS, J., delivered the opinion of the Court, in which ROBERTS, C. J., and SOTOMAYOR, KAGAN, KAVANAUGH, BARRETT, and JACKSON, JJ., joined. KAGAN, J., filed a concurring opinion, in which SOTOMAYOR, KAVANAUGH, and BARRETT, JJ., joined. JACKSON, J., filed a concurring opinion. ALITO, J., filed a dissenting opinion, in which GORSUCH, J., joined. "an appropriation is simply a law that authorizes expenditures from a specified source of public money for designated purposes." "The statute that provides the Bureau's funding meets these requirements." 3. Harrow v. Department of Defense- Kagan, unanimous: A federal employee subjected to an adverse personnel action may complain to the Merit Systems Protection Board. If the Board rules against him, he may appeal to the Court of Appeals for the Federal Circuit “within 60 days.” 5 U. S. C. §7703(b)(1). The question presented is whether that 60-day limit is “jurisdictional,” and therefore precludes equitable exceptions. We hold that the limit, like most filing deadlines, is not jurisdictional. #CotterOnCourt #SCOTUS #still39orsotogo Adam Feldman, J.D., Ph.D.
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On June 24, 2024, the U.S. Court of Appeals for the Second Circuit reiterated that plaintiffs have standing to bring short-swing profits claims under Section 16(b) of the Securities Exchange Act of 1934. Reversing a district court decision in the case of Packer ex rel. 1-800-Flowers. com, Inc. v. Raging Capital Management, LLC, the Second Circuit concluded that the U.S. Supreme Court’s decision in TransUnion LLC v. Ramirez did not negate Second Circuit precedent finding that plaintiffs have Article III standing in the Section 16(b) context. The U.S. Securities and Exchange Commission, supporting the reversal, argued that upholding the district court's decision would undermine Section 16(b) by significantly limiting the ability of plaintiffs to demonstrate standing, contrary to Congressional intent. In this Client Alert, Dan Tabak and Christine Jordan explore Article III standing in Section 16(b) actions, the case law and procedural history leading up to Packer, the Second Circuit’s decision, and the key takeaways. Read more: https://lnkd.in/ermXq9yA
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The US #SupremeCourt recently affirmed the constitutionality of the Consumer Financial Protection Bureau's funding structure. This reverses a contentious 2022 decision by the Fifth Circuit. Our alert overviews the ruling and key takeaways for the #FinancialServices industry. #SCOTUS #CFPB
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Third Party Vendor Auditor at Resource Management Services- Collection Compliance and Oversight.
Check out my latest blog that discusses the ruling from the Supreme Court in regards to the funding structure of the CFPB as well as remarks from the CFPB Director Rohit Chopra on the ruling. #cfpb https://lnkd.in/ereKWkrQ
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Here's the latest on the CTA BOI rule, which is treating small biz like financial criminals (and may turn them into financial criminals)- read/share all: -A court stayed (or got rid of) the injunction from earlier this month, putting filing and penalties back on the table -The filing deadline has been moved to Jan 13, 2025, creating a small window for more information -The Center For Individual Rights has petitioned the courts in the National Federation of Independent Business (NFIB) case, asking for the injunction to be restored and a ruling by January 6th -Our friends at S Corporation Association noted the ruling in the National Small Business Association case could come soon (appeal arguments were heard in September) and there's another case in Michigan which may see a ruling soon. Please stay vigilant and use your voice against the CTA BOI. Also, please keep asking the Trump admin to make a statement of non-enforcement of penalties (or better yet, to get rid of the entire thing). For updates on this (and economic/biz/financial topics), join my free newsletter at https://lnkd.in/g3FxWYiD
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In a somewhat surprising, but welcome, development, the panel of judges at the 5th Circuit Court of Appeals assigned to issue an eventual final decision in NFIB’s case against the Corporate Transparency Act’s beneficial ownership information disclosure rules on the merits reversed the Dec. 23 decision by the rotating Motion’s Panel to stay the Eastern District Court’s injunction against the disclosures. This latest order, filed on Dec. 26, means that, at least for now, the requirements to file beneficial ownership information disclosures with the Financial Crimes Enforcement Network by January 13 is once again on hold. The new panel of judges will hear the case and decide whether they agree with the Eastern District of Texas that the beneficial ownership information disclosures are not constitutional. Filing requirements are not required while that case is proceeding. NACS filed an amicus brief in the appeal on behalf of our members in support of NFIB. While no filing is currently required under this latest development, the requirements may come back pending further developments in this case. NACS will keep its members informed of further developments as the case proceeds.
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For anyone interested, here are some thoughts on the Supreme Court's excellent decision about Congress's power of the purse in Consumer Financial Protection Bureau v. Community Financial Services Association of America. Thanks to Penn Law School's Regulatory Review for including me in this series! https://lnkd.in/g62-fM_x
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Need a new coffee table book with little to no pictures? On January 14, the CFPB released a 363 page, 42 tabbed “Compendium of Recent CFPB Guidance”. The compendium contains guidance documents regarding the federal consumer financial protection laws that the CFPB has released in the last several years due to the evolution in the consumer financial markets. Congress spread enforcement responsibility for these laws among a large set of federal and state government agencies, including state law enforcement and regulators. The Bureau states that the guidance documents reflect the considered “judgment, reasoning, knowledge, and expertise of the CFPB.” In releasing the compendium, the CFPB hopes that the guidance documents implementing the federal consumer financial laws prove useful to courts in their interpretation of those laws, as well as to the various enforcers of them, including state and tribal attorneys general and regulators and other prudential regulators. https://lnkd.in/g3naH7bZ #cfpb #fdic #occ #compliance
