When the Supreme Court ruled last week to continue funding the controversial Consumer Financial Protection Bureau (CFPB), some were surprised when Justice Clarence Thomas broke with his conservative colleagues and wrote the majority opinion that kept the CFPB intact.
In a 7-2 decision, the Court found that Congress had uniquely authorized the Treasury Department to draw funds directly from the Federal Reserve, thereby circumventing the normal funding mechanisms set out in the Constitution’s Appropriations Clause.
The financial watchdog simply requires the CFPB director to circumvent regular congressional appropriations and request funds from the Treasury Department when necessary. Banking industry opponents of the CFPB argue that this is unconstitutional, citing the appropriations clause.
But the high court majority disagreed, stating: “In this case we must decide the narrow question of whether this funding mechanism complies with the Appropriations Clause. We find that it does,” the ruling said.
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Justice Clarence Thomas speaks during a ceremony on the South Lawn of the White House on October 26, 2020. (Al Drago/Bloomberg via Getty Images)
“Congress funds most federal agencies annually. This annual process requires each agency to regularly request funds from Congress for the following year’s operations. The Consumer Financial Protection Bureau is different. The Bureau does not have to petition for funds every year. Instead, Congress authorized the Bureau to withdraw from the Federal Reserve System an amount the Director deems ‘reasonably necessary’ to carry out the Bureau’s mission, subject to an inflation-adjusted cap,” Thomas explained.
“While there may be other constitutional limitations on Congress’ power to create and fund executive agencies, the specification of the sources and purposes of funds is all that is required by an appropriations clause.”
“Laws authorizing the Treasury Department to carry out its functions with funds drawn from the Federal Reserve System’s general revenues satisfy the Appropriations Clause,” the opinion states.
In suing the CFPB, the banking associations “have not presented any defensible argument that the Appropriations Clause requires anything more than a law authorizing the expenditure of specific funds for specific purposes,” Thomas wrote.
But Justices Samuel Alito and Neil Gorsuch strongly dissented, stating that “the Court should not [CFPB] It can fund its own programs without congressional control or oversight.”
“The dissent acknowledges that the issue in this case ultimately concerns the meaning of ‘budget,'” Thomas wrote in the majority opinion.
“The law chastises us for trying to consult a dictionary to ascertain the original meaning of the word, instead claiming that ‘appropriation’ is ‘a term of art whose meaning has been shaped by centuries of history,'” Thomas wrote.
“However, as we have explained at length, both pre-ratification and post-ratification budgetary practices support our understanding of the sources and purposes of funding,” he said.
The CFPB has been a thorn in Republicans’ side since Sen. Elizabeth Warren, D-Mass., helped create it to protect consumers from financial scams after the market collapse of 2008. The bureau has the power to regulate banks and lending institutions through federal rules.
President Barack Obama said in 2011 that the institution was “the brainchild of Queen Elizabeth II, whose fierce drive, intellect and boundless energy have brought and will continue to bring about great, positive change for our country.”
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Justice Clarence Thomas, Chief Justice John Roberts and Justice Samuel Alito. (Javin Botsford/The Washington Post via Getty Images)
Mick Mulvaney, the former acting director of the CFPB during the Trump administration, even called the bureau “Elizabeth Warren’s baby.”
Warren has been a critic of the Supreme Court since President Trump upended its ideological majority with the appointment of Justices Amy Coney Barrett, Brett Kavanaugh and Gorsuch, and in 2021 called for expanding the court, saying the current court “threatens the foundations of our democracy.”
She harshly criticized Thomas, accusing him of “corruption” for taking vacations paid for by major Republican donors last year and not disclosing them. Thomas said he consulted with his colleagues and the Judicial Conference and followed ethics rules regarding reporting those trips.
Fox News Digital has reached out to Warren for comment.
Senator Elizabeth Warren speaks before the start of a Senate Banking Committee hearing on Capitol Hill on April 27, 2023. (Drew Ungerer/Getty Images)
When the Supreme Court ruled in the CFPB’s favor last week, she praised the CFPB, saying it “followed the law.”
Peggy Little, senior counsel for the New Civil Liberties Union, dissented from the majority’s decision, but she believes Thomas’s work “undermines the notion that all conservatives decide cases in the same way.”
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“I think this is a healthy corrective to the way the media talks about the courts,” she told Fox News Digital.
She added: “It would be a mistake for Congress to consider.” [the decision] It “gives permission to establish a similar system” and said the High Court “may review it and realise its error”.
Mr. Thomas “operates to his own rhythm,” said David B. Rivkin Jr., an appellate and constitutional law attorney and former White House and Justice Department counsel.
“The idea that six conservative justices would act in lockstep is absurd,” Rivkin said. “There are clear differences not only in how they decide specific cases, but in their judicial philosophies. There are many combinations of fundamentalism and textualism.”
“Justice Thomas is doing what he thinks is right, following the text and the original intent of how it was written, and he doesn’t care that he’s the only dissenting justice,” John Thew, a constitutional lawyer who worked in the Bush administration, told Fox News Digital.
In 2010, Mr. Shue co-authored the CFPB’s first white paper with former White House counsel Ambassador C. Boyden Gray, which criticized the agency’s leadership and funding structure.
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“If the other justices agree with him, that’s fine, but he’s going to go ahead and do it alone,” Shu said. “Justice Thomas is a true principle and textualist, as is Justice Alito. In this case, they each interpret the term ‘budget’ in different ways, which is further proof that the justices do not vote in lockstep, as some have erroneously asserted.”
“Neither Justice Alito nor Justice Thomas is results-oriented; that is, they don’t have a desired outcome in mind and then try to justify it in some way after the fact,” Shu explained.
“Instead, they follow the letter and intent of the law, without regard for political consequences or backlash. That’s one of the reasons the Constitution gives federal judges lifetime appointments and protects their offices from political whims,” he said.
