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 annually from the combined earnings of the Federal Reserve System an amount the CFPB Director deems “reasonably necessary,” subject to an inflation‑adjusted cap.
The CFPB retained unused funds and could invest them; statute states those transfers are not to be treated as Treasury appropriations and limits Appropriations Committee review.
Trade associations representing payday lenders challenged a CFPB Payday Lending Rule and asserted the Bureau’s funding mechanism violates the Appropriations Clause (Art. I, §9, cl.7).
The district court upheld the funding statute; the Fifth Circuit reversed, holding the mechanism failed the Appropriations Clause because it abdicated Congress’s power of the purse.
The Supreme Court reversed the Fifth Circuit (May 16, 2024), holding the statute satisfies the Appropriations Clause as an appropriation that identifies a source and authorizes expenditure for designated purposes.
Opinions: majority (Thomas) + concurrences (Kagan, Jackson) upholding the funding as consistent with text, history, and practice; dissent (Alito, joined by Gorsuch) argued the scheme is unprecedented and undermines congressional control and separation of powers.

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether CFPB funding violates the Appropriations Clause	Funding is not an appropriation because the Bureau (not Congress) chooses annual amounts and can fund itself indefinitely	Statute identifies a public source (Fed Reserve earnings), limits the amount (cap), and authorizes specific purposes	Statute is an appropriation: clause requires a law authorizing expenditure from an identified source for designated purposes
Whether funds "drawn from the Treasury" includes Federal Reserve earnings destined for the Treasury	These are not ordinary Treasury appropriations; Fed earnings are distinct	Surplus Fed earnings would otherwise flow into the general Treasury fund, so they qualify as Treasury money	Money otherwise destined for the general fund of the Treasury qualifies under the Appropriations Clause
Whether appropriations must be periodic/time‑limited or require repeated congressional agreement	Appropriations must be periodically approved (to preserve legislative control and ability of either chamber to block funding)	Constitution expressly limits only army appropriations to two years; historical practice includes standing and fee‑based appropriations	No general textual requirement of periodic (annual) appropriations beyond the army example; standing/fee‑based funding can satisfy the Clause
Whether upholding this funding would permit congressional abdication of the purse and undermine separation of powers	The scheme gives the Executive an unchecked fiscal blueprint transferable to other agencies, destroying Congress's fiscal check	The Appropriations Clause is a limitation requiring a law authorizing expenditures from identified funds for specified purposes; other constitutional checks remain	Court declines to read additional judicially‑enforced constraints into the Clause; source+purpose statutory authorization suffices (separation‑of‑powers concerns not a basis to invalidate here)

Key Cases Cited

Cincinnati Soap Co. v. United States, 301 U.S. 308 (Court explained money may be paid out of the Treasury only via statute)
Office of Personnel Management v. Richmond, 496 U.S. 414 (statutory authorization required for Treasury disbursements)
Seila Law LLC v. Consumer Financial Protection Bureau, 591 U.S. 197 (CFPB structural features and removal‑for‑cause invalidation context)
Bowsher v. Synar, 478 U.S. 714 (contemporaneous practice as evidence of constitutional meaning)
McCulloch v. Maryland, 17 U.S. 316 (Constitution adapts to new challenges; deference to political branches where text permits)
Free Enterprise Fund v. Public Company Accounting Oversight Bd., 561 U.S. 477 (weight of historical precedent in structural constitutional questions)
Clinton v. City of New York, 524 U.S. 417 (discussion of appropriations and longstanding practice)