Over 130 lawmakers from the House and Senate signed an amici brief criticizing the funding structure of the Consumer Financial Protection Bureau (CFPB), stating its enacting legislation overstepped Congress’ appropriations power.

Sens. Katie Britt (R-Ala.) and Tim Scott (R-S.C.), as well as Reps. Patrick McHenry (R-N.C.) and Andy Barr (R-Ky.) were among the signors.

“The Appropriations Clause ‘assure[s] that public funds will be spent according to the letter of the difficult judgments reached by Congress as to the common good and not according to the individual favor of government agents in the executive branch,” the brief stated.

“But when it came to funding the CFPB, the Dodd-Frank Act delegated those ‘difficult judgments’ wholesale to the CFPB itself, whose director can unilaterally decide, in perpetuity, how much money he wants for the agency to carry out its ‘broad’ and ‘potent’ regulatory and enforcement powers, which extend to ‘levying knee-buckling penalties against private citizens,’ not just entities in highly regulated industries.”

The legislators reiterate the reasoning behind the Fifth Circuit court’s decision, stating the bureau is “dually insulated” because it requests its money from the Federal Reserve, and this money is kept in a Federal Reserve Bank, rather than returned to the Treasury at the end of its fiscal session. The authors noted the bureau has been “aggressively hoarding cash” – stating over $600 million added to the account in the first two quarters of 2023.

“Because of these provisions, the only way for Congress to reduce the CFPB’s funding level is to amend Dodd-Frank itself and then override an inevitable veto, necessitating supermajorities in both chambers.”

The brief also challenged the bureau’s argument that its funding structure is like those of the Comptroller of the Currency, the Federal Deposit Insurance Corp., and the U.S. Postal Service. It stated this claim is inaccurate because these other agencies generate most of their revenue from direct fees or assessments on regulated parties, a mechanism used since the beginning of the U.S.

“The court need not determine which particular aspect of the CFPB’s funding scheme is the most problematic,” the brief continued. “This is the easy case. The CFPB ‘is in an entirely different league’ from other entities when it comes to its insulation from Congress, to the point that the CFPB currently operates as ‘a sort of junior-varsity Congress’ setting its own funding levels in perpetuity. Such insulation means that Congress itself is not determining the CFPB’s funding.

“The court should affirm the judgment below, which will return the matter of the CFPB’s funding to the normal political and legislative channels, as Article I and the Appropriations Clause require.”