Tish James is trying to stop the Supreme Court from gutting consumer protections

Safeguards put in place following 2008 at risk after Fifth Circuit ruling

May 17, 2023 Rob Abruzzese
Attorney General Letitia James, along with a coalition of five other state attorneys general.Photo: Rob Abruzzese/Brooklyn Eagle
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In a bid to secure the future of the Consumer Financial Protection Bureau (CFPB), Attorney General Letitia James is leading a coalition of 24 attorneys general in filing an amicus brief with the Supreme Court.

This effort comes in response to a decision by the U.S. Court of Appeals for the Fifth Circuit, which threatens the existence of the CFPB and the validity of over a decade of the bureau’s regulatory and enforcement actions.

The CFPB, established following the 2008 financial crisis, plays a crucial role in maintaining the stability of key financial sectors and safeguarding consumers against unfair and abusive business practices. It created and enforces nationwide consumer financial standards across a range of areas, including mortgage lending and debt-collection practices.

The recent decision by the Fifth Circuit, however, concluded that the CFPB’s operations violate the U.S. Constitution’s Appropriations Clause due to its funding via the Federal Reserve rather than receiving an annual appropriation from Congress. Consequently, the court ordered the vacating of a payday-lending regulation developed by the agency.

Attorney General James and the coalition are urging the Supreme Court to reverse this decision, which they warn could drastically curtail consumer protection efforts in their states and harm millions of Americans.

“The CFPB has proven that it is able to stand up for consumers and help states, including New York, to ensure that our residents are protected,” said Attorney General James. “That is why opponents are attacking the agency, and that is why I am proud to push back on these brazenly anti-consumer protection efforts. I will continue to work with my fellow attorneys general to defend the CFPB and ensure it is able to work with our respective states to help protect consumers throughout the country.”

Attorney General James and the coalition caution that if the Supreme Court upholds the appellate court’s approach, it could result in the invalidation of many CFPB rules and other regulatory actions, destabilizing the consumer financial sector and harming millions of consumers nationwide. They argue that this outcome is not mandated by the U.S. Constitution.

The coalition, headed by Attorney General James, includes the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Hawaiʻi, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia.

This initiative is part of Attorney General James’ ongoing efforts to protect consumers. Her office has previously collaborated with the CFPB on several cases, including lawsuits against Credit Acceptance Corporation, a predatory debt collection operation, and MoneyGram International, Inc. — all for violations of consumer protection laws.


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