Top Democrats are seeking judicial intervention to stop President Trump’s planned closure of the Consumer Financial Protection Bureau (CFPB).
U.S. Senator Elizabeth Warren (D-Mass.), Rep. Maxine Waters (D-Calif.), and Senate Democratic Leader Chuck Schumer (D-N.Y.) filed an amicus brief Monday urging the U.S. Court of Appeals for the D.C. Circuit to rehear a case challenging the Trump administration’s mass firings at the agency. The lawmakers argue that dismantling the CFPB is unconstitutional and undermines Congress’s authority.
MortgagePoint had earlier reported on the agency bracing for the cuts. According to individuals familiar with the matter, the Bureau faces a self-imposed funding crunch, with staff concerned there may be insufficient funds available to meet payroll and severance costs in the new fiscal year which began Oct. 1.
The Crux of the Matter
According to reports, an email from the human resources department said it would not proceed with plans to restructure the agency before federal courts have finally ruled on them but was evaluating “workforce optimization opportunities.”
“A President, of course, may disagree with Congress’s choice,” the brief said. “When that happens, the remedy is to participate in the political process and make a proposal to Congress, not to usurp legislative power and unilaterally dismantle an agency Congress created.”
In the filing, the lawmakers also outlined the CFPB’s importance in protecting American consumers: “Shuttering the CFPB would not just run afoul of the Constitution, it would also destroy the framework Congress created to safeguard the finances of American consumers. That framework has been a resounding success, with the Bureau delivering billions back to consumers who have been defrauded. In its absence, entire swaths of the market will be unprotected from the type of predatory conduct that caused the 2008 crisis and led to the creation of the CFPB.”
The Latest Pushback
The amicus brief is the latest attempt by Sen. Warren, who Harvard Law School cites as a driving force behind the creation of the agency, and some other legislators to seek to keep the agency open. Earlier efforts from Democrats have included:
- A February forum, “Trump-Musk Attack on American Consumers,” where they released a report on the Trump Administration’s drop in responding to Americans’ consumer complaints.
- They spoke out against Republicans for overturning a CFPB rule capping overdraft fees for Americans in March.
- In June, Democrats stopped Republicans’ attempt to slash CFPB funding to 0% and pushed back against further attempts to slash its funding in Trump’s “Big, Ugly Bill”
According to a Political Pro article, House Financial Services Chair French Hill said that reforming the CFPB’s funding structure remains “the principal focus” of his committee’s efforts to attach legislation to a GOP reconciliation package.
The Arkansas Republican said the committee is keeping its options open regarding how to reform CFPB funding, which Republicans have pushed for years to bring under the Congressional appropriations process. The agency, established in 2010 under the Dodd-Frank law, currently gets its funding from the Federal Reserve.
