Consumer Financial Protection Bureau v. Community Financial Services Assn. of America, Ltd., 601 U.S. 416

Background:

Congress created the Consumer Financial Protection Bureau (CFPB) in Dodd‑Frank (2010) and funded it by statute to draw from the Federal Reserve System’s combined earnings an amount the Director deems “reasonably necessary,” subject to an inflation‑adjusted cap. (12 U.S.C. §5497)
The Bureau promulgated a Payday Lending Rule; trade associations representing payday lenders challenged the rule and alleged the CFPB’s funding violates the Appropriations Clause.
The District Court upheld the Bureau; the Fifth Circuit reversed, holding the CFPB’s funding mechanism violated the Appropriations Clause because it effectively let the agency self‑fund indefinitely.
The Supreme Court granted certiorari to decide whether the CFPB’s funding statute satisfies the Appropriations Clause and reversed the Fifth Circuit.
The Court (majority: Thomas; joined by Roberts, Sotomayor, Kagan, Kavanaugh, Barrett, Jackson) held an appropriation is a law authorizing expenditures from an identified public source for designated purposes; the CFPB statute meets that test. Concurring opinions by Kagan and Jackson; dissent by Alito (joined by Gorsuch).

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether CFPB funding violates the Appropriations Clause	CFPB’s Fed‑earnings funding lets the agency take public money without an appropriation and removes Congress’s purse power	The statute is a law that authorizes draws from a specified public source for specified purposes	Held: statute is an "Appropriation made by Law" — identifies source and purpose, so satisfies the Clause
Whether agency control over annual amount (director chooses amount up to statutory cap) violates Clause	Allowing CFPB to decide annual draw abdicates Congress’s appropriation function	Historical practice includes "sums not exceeding" grants that left amount to Executive discretion	Held: permissible — "sums not exceeding" appropriations are historically established; cap preserves congressional control
Whether appropriations must be time‑limited or periodically agreed by both Houses	Appropriations must be periodic so Congress can withhold funds and check agencies	Constitution limits Army appropriations to 2 years but otherwise permits standing appropriations; early Congress used fee/commission models	Held: no general timing requirement; only Army clause imposes a temporal limit
Whether upholding CFPB funding would permit permanent, unchecked executive financing and destroy separation of powers	Permits Congress to abdicate purse power and enable Executive tyranny; CFPB’s combination of features is unprecedented	Appropriations Clause is a textual limit that requires a law authorizing disbursement from a specified source for specified ends; other constitutional checks exist	Held: Appropriations Clause does not impose the additional limits plaintiffs seek; other political/constitutional checks remain available

Key Cases Cited

Seila Law LLC v. Consumer Financial Protection Bureau, 591 U.S. 197 (2020) (addressing CFPB’s structure and removal protections)
Cincinnati Soap Co. v. United States, 301 U.S. 308 (1937) ("no money can be paid out of the Treasury unless appropriated by statute")
Office of Personnel Management v. Richmond, 496 U.S. 414 (1990) (payments from Treasury require statutory authorization)
Reeside v. Walker, 11 How. 272 (1851) (historical statement on appropriation requirement)
Bowsher v. Synar, 478 U.S. 714 (1986) (use of contemporaneous practice in constitutional interpretation)
Free Enterprise Fund v. Public Company Accounting Oversight Board, 561 U.S. 477 (2010) (weight of historical precedent when assessing novel structures)
Clinton v. City of New York, 524 U.S. 417 (1998) (discussion of "sums not exceeding" appropriations and executive discretion)
McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316 (1819) (constitutional text interpreted in light of adaptability and powers of political branches)