Tennessee's top consumer protection official joins legal effort to undermine federal consumer watchdog
Tennessee Attorney General Jonathan Skrmetti is backing an effort in support of a legal challenge that would radically change the funding provided to the Consumer Financial Protection Bureau (CFPB), the nation's top consumer watchdog agency in the financial marketplace.
Skrmetti signed a brief in support of payday lending interests challenging the legitimacy of the CFPB in a case currently pending before the U.S. Supreme Court.
The U.S. Court of Appeals for the Fifth Circuit, in an October decision, ruled the 2010 Congress improperly delegated the power of appropriations when it granted CFPB an independent, perpetual income stream.
"The Appropriations clause is essential to the preservation of the separation of powers," General Skrmetti said. "No federal agency can ignore the constitutional structure of our government."
Consumer advocates say the independent funding stream is essential to the effectiveness of the CFPB and note that other federal regulatory agencies enjoy the same financial independence.
Morgan Harper, Director of Policy and Advocacy at the American Economic Liberties Project, said, “The Supreme Court must move swiftly to overturn the Fifth Circuit’s dangerous opinion and let the CFPB focus on its critical job of protecting working Americans and small businesses from predatory financial firms like those CFSA represents.
"Beyond the CFPB, the Fifth Circuit’s ruling threatens the nation’s economic stability, jeopardizing the constitutionality of the Federal Reserve – the linchpin of the entire global economy – as well as other key financial agencies."