Attorney General Mayes Urges U.S. Supreme Court to Preserve Consumer Protection Watchdog

PHOENIX–Attorney General Mayes joined a multistate coalition in submitting an amicus brief to the Supreme Court, urging the Court to overturn a decision of the U.S. Court of Appeals for the Fifth Circuit that threatens the future operation of the Consumer Financial Protection Bureau (CFPB) and the viability of more than ten years of the agency’s regulatory and enforcement actions. 
 
“The Consumer Financial Protection Bureau is responsible for providing American consumers with over $16 billion in monetary relief and has received nearly $4 billion in civil penalties against bad actors as a result of its enforcement actions over the last eleven years,” said Attorney General Kris Mayes. “Americans count on the CFPB to act as their watchdog and its elimination would significantly impact consumer protection efforts in Arizona. I am proud to stand with my fellow attorneys general in urging the Supreme Court to overturn the Fifth Circuit ruling and protect consumers nationwide.”
 
The CFPB was set up to create nationwide consumer protection standards and to work with, and supplement, individual state agencies. In Consumer Financial Protection Bureau v. Community Financial Services Association of America, Ltd., the Fifth Circuit concluded that the agency’s operations violate the U.S. Constitution’s Appropriations Clause because it does not receive an annual appropriation from Congress and is instead funded through the Federal Reserve, and ordered that a payday lending regulation created by the agency be vacated. The coalition of attorneys general, led by New York Attorney General Letitia James, urge the Supreme Court to reverse because the Fifth Circuit’s decision will jeopardize the beneficial consumer protection and regulatory actions taken by the CFPB.  
 
In the aftermath of the 2008 financial crisis, Congress established the CFPB to play a critical role in the stability of key sectors of the financial market and protect consumers against unfair and abusive business practices. Since its establishment, the CFPB has created and enforced nationwide consumer financial standards in areas ranging from mortgage lending requirements to debt-collection practices. Additionally, many CFPB regulations target financial sectors where individual states may face challenges in regulating fraudulent and abusive practices. 
 
Attorney General Mayes and the coalition note that if the appellate court decision takes effect, it could drastically restrict consumer protection efforts in their states, and would harm millions of Americans. The Fifth Circuit had invalidated a prior regulation issued by the CFPB, after concluding that the CFPB’s funding was unconstitutional.

Attorney General Mayes and the coalition caution that this approach, if adopted by the Supreme Court, could result in the invalidation of numerous CFPB rules and other regulatory actions. That result would harm millions of consumers around the country, while destabilizing the consumer financial sector. The amicus brief urges that this result is not mandated by the Constitution. 
 
Joining Attorney General Mayes in filing today’s amicus brief are the attorneys general of California, Colorado, Connecticut, Delaware, Hawai'i, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia.