MOAA recently joined a coalition of military and veterans’ organizations in filing a recent Supreme Court brief supporting a federal agency critical to the financial health of servicemembers, veterans, and their families.
The amicus, or “friend of the court,” brief comes as the court hears appeals in a ruling by a federal appeals court on the funding structure of the Consumer Financial Protection Bureau (CFPB), created in 2010 in response to the 2009 financial crisis. The CFPB specifically aims to protect consumers from predatory lending practices, has successfully held financial institutions accountable for unfair and deceptive practices, and has helped millions of consumers save money on their mortgages, credit cards, and other loans.
The CFPB has also crucially advocated for military servicemembers and their families, taking enforcement and protective actions against financial institutions that have targeted those individuals with predatory lending practices. The agency also is responsible for much of the enforcement of the landmark 2006 Military Lending Act, as well as overseeing the 2015 regulatory expansions.
The CFPB has been under fire since its inception, but recent legal challenges to its funding structure pose new threats. Although the CFPB is funded by a combination of fees paid by financial institutions and appropriations from Congress, the 5th U.S. Circuit Court of Appeals ruled the CFPB's funding structure violates the Constitution's Appropriations Clause, which requires all federal spending be approved by Congress.
The case, Consumer Financial Protection Bureau v. Community Financial Services Association of America, is set to be argued before the Supreme Court in November. The military and veteran community has a strong interest in the outcome of this case, as servicemembers, veterans, and their families are regularly targeted by predatory financial practices.
The amicus brief submitted to the Supreme Court argues that the CFPB funding structure is constitutional, and that the agency is essential to protecting servicemembers and their families from predatory lending, citing several examples involving payday loans targeting servicemembers and their families. The funding structure is part of why the agency is successful, the brief concludes, reminding the court that the CFPB “plays a critical and unique role in promoting the financial wellbeing of America’s 16.5 million veterans, over 2 million servicemembers, and their families.”
The Supreme Court's decision in this case will have a major impact to be felt for years to come. The loss or diminishing of the CFPB would be catastrophic for the financial health of servicemembers, veterans, and their families, making it considerably more difficult for them to access legitimate financial products and services.
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