Richmond, Va.— The Supreme Court has upheld the constitutionality of the funding method Congress chose for the Consumer Financial Protection Bureau (CFPB), allowing a vital agency to continue its work in holding Wall Street and predatory lenders to account, and promoting economic and racial justice.
Virginia Organizing has advocated for the work of the CFPB to protect citizens from predatory lending for over two decades. “Virginia Organizing has supported the CFPB since it was created in 2010 because we recognize the need for a government watchdog against predatory lenders. The CFPB has done a great job of protecting Virginians from exploitation and abuse by finance companies,” said Lily Hungarland, chairperson of Virginia Organizing.
The ruling comes as good news following a lawsuit against the CFPB by the Community Financial Services Association (CFSA), a lobby group for payday lenders that opposed the use of federal money to fund the bureau.
“The Supreme Court has refused to bless the radical and ungrounded argument from the payday lenders that the CFPB’s funding mechanism is unconstitutional, which is good news for people and communities across the country,” said Lisa Donner, executive director at Americans for Financial Reform Education Fund. “This decision removes a major threat to the agency’s work, and reaffirms the independence that allows it to continue standing up for the public interest against abusive financial practices.”
The payday lenders prevailed in the Fifth Circuit Court of Appeals and the Department of Justice appealed the case to the Supreme Court. AFREF, together with its partners, and many other experts and organizations filed amicus briefs at the high court outlining the flaws in CFSA’s logic.
“The CFPB’s wide and varied work in support of greater racial equity in financial services is a central pillar of its efforts,” said Amanda Jackson, consumer campaign director at AFREF. The bureau stops “big banks and predatory financial companies from ripping people off, extracting fees from those who can least afford it, and increasing the racial wealth gap, it will continue to draw attacks from the industries it regulates and policy makers who side with them.”
SInce its creation the CFPB has won more than $19 billion in relief for consumers ripped off by big banks and other financial wrongdoers. Recently the agency has pursued policies to rein in junk fees that cost families tens of billions of dollars each year, including by finalizing a rule to cap excessive credit card late fees, and proposing limits on punitive overdraft fees. Other key initiatives include requiring fairer credit reports, reducing the harm of medical debt collections, fighting inequity in home appraisals, increasing consumer rights to control their own data and much more.
For more information or to interview a spokesperson for Virginia Organizing, please contact Michelle Tabbanor at 434-422-1012 or mtabbanor@virginia-organizing.org.
