Editor’s Note: This article was published as part of the inaugural edition of The Commonwealth Times and reflects events as reported at the time of the referenced news coverage.
WASHINGTON — There exists in the marbled quietude of the Supreme Court chamber a peculiar alchemy by which questions of bureaucratic plumbing become matters of constitutional destiny. So it was when the Justices took up the challenge to the Consumer Financial Protection Bureau’s funding mechanism — a case that arrived dressed in the dry garments of appropriations law but carried within it the blueprints, or the demolition orders, for the modern administrative state itself.
The case, Community Financial Services Association of America v. Consumer Financial Protection Bureau, first reached the Supreme Court in its October 2023 term, and the Court issued its ruling in May 2024, voting 7-2 to uphold the CFPB’s funding structure as constitutional. Justice Clarence Thomas, writing for the majority, concluded that Congress’s decision to fund the Bureau through the Federal Reserve System rather than through annual congressional appropriations did not violate the Appropriations Clause of the Constitution. Yet the reverberations of that decision — and the questions it left unanswered — continue to shape the legal and political landscape surrounding independent regulatory agencies, particularly as the CFPB has found itself at the center of the Trump administration’s broader campaign to dismantle or neutralize federal regulatory bodies.
To understand the stakes, one must first understand the architecture. The CFPB was born of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, itself a creature of the catastrophic financial crisis that annihilated trillions in household wealth and laid bare the grotesque insufficiency of existing consumer protections. Senator Elizabeth Warren of Massachusetts, then a Harvard Law professor, conceived of the Bureau as a singular entity dedicated to shielding ordinary Americans from predatory lending, deceptive financial products, and the baroque cruelties of an industry that had learned to profit from confusion. Congress, in its design, chose to insulate the CFPB from the annual appropriations process — funding it instead through a capped draw on the Federal Reserve System’s earnings — precisely to prevent the regulated industry from using its considerable lobbying power to defund the regulator into impotence.
This funding mechanism became the fulcrum upon which opponents sought to topple the entire enterprise. The Community Financial Services Association of America — a trade group representing payday lenders, among others — argued that by circumventing the annual appropriations process, Congress had violated Article I, Section 9 of the Constitution, which provides that ‘No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.’ The Fifth Circuit Court of Appeals agreed, ruling in October 2022 that the CFPB’s funding structure was unconstitutional — a decision so sweeping that it threatened to invalidate every rule the Bureau had ever promulgated.
The Supreme Court’s reversal of the Fifth Circuit was notable not only for its breadth — only Justices Samuel Alito and Neil Gorsuch dissented — but for the originalist reasoning Justice Thomas employed. The majority opinion surveyed the history of appropriations from the founding era forward, noting that Congress has long funded various governmental functions through mechanisms other than annual appropriations. The Customs Service, the Post Office, the Mint — each operated for significant periods under standing or indefinite appropriations. Thomas wrote that the Appropriations Clause requires only that Congress authorize the expenditure of funds by law, not that it do so on an annual basis. The Dodd-Frank Act’s provision, which authorized the CFPB to draw up to a specified percentage of the Federal Reserve System’s operating expenses, satisfied this requirement.
Yet if the constitutional question appeared settled in law, it has proven anything but settled in practice. The Trump administration, which returned to power in January 2025 with an aggressive deregulatory agenda, has pursued the functional dismantlement of the CFPB through executive action rather than legislative repeal. In February 2025, acting CFPB Director Russell Vought — installed after the removal of the Senate-confirmed director — ordered the Bureau to cease most supervisory and enforcement activities. Staff were placed on administrative leave. The Bureau’s headquarters was effectively shuttered. Elon Musk’s Department of Government Efficiency, the extralegal advisory body tasked with identifying federal spending to eliminate, reportedly identified the CFPB as a prime target for zeroing out.
The constitutional implications of this administrative defenestration are profound and distinct from those adjudicated in Community Financial Services Association. Where the 2024 case asked whether Congress could fund an agency outside the annual appropriations process, the current confrontation asks a different and perhaps more consequential question: whether the Executive may unilaterally nullify an agency that Congress created, funded, and empowered by statute. The Take Care Clause of Article II commands that the President ‘shall take Care that the Laws be faithfully executed.’ The deliberate mothballing of an agency whose existence is mandated by law — whose funding mechanism the Supreme Court itself has affirmed — would appear to stand in direct tension with this constitutional obligation.
Multiple lawsuits have been filed challenging the administration’s actions. In February and March 2025, a federal judge in the District of Columbia issued temporary restraining orders blocking certain efforts to dismantle the Bureau, finding that plaintiffs — including state attorneys general and consumer advocacy organizations — had demonstrated a likelihood of irreparable harm. The National Treasury Employees Union, representing CFPB staff, has likewise pursued legal action. The trajectory of these cases suggests that the Supreme Court may once again be called upon to define the boundaries of executive power over congressionally mandated agencies — this time not through the lens of appropriations, but through the more volatile lens of the separation of powers itself.
The broader implications extend well beyond consumer finance. The CFPB is merely the most visible front in a wider campaign against the administrative state — a campaign whose intellectual architecture was laid by the unitary executive theory and whose practical instruments include the Supreme Court’s own decisions in West Virginia v. EPA and Loper Bright Enterprises v. Raimondo, the latter of which overturned the Chevron doctrine of judicial deference to agency interpretation of ambiguous statutes. If an administration may simply refuse to operate an agency Congress has created and the Court has upheld, the appropriations power — that most fundamental legislative prerogative — becomes a dead letter. Congress may build; the Executive may simply refuse to inhabit.
This is not a question that divides neatly along ideological lines, though the current political alignment may make it appear so. Conservative legal scholars of an older vintage — those who venerate the separation of powers as a structural safeguard rather than an instrument of executive supremacy — have expressed disquiet at the notion that presidential power extends to the wholesale nullification of statutory mandates. The Framers designed a system of antagonistic institutions precisely because they understood that concentrated power, however wielded and by whomever held, corrodes the liberty it purports to protect.
The CFPB, in its brief and turbulent existence, has returned more than twenty billion dollars to consumers harmed by illegal financial practices. It has brought enforcement actions against some of the largest financial institutions in the world. It has written rules governing mortgage disclosures, payday lending, and debt collection that, whatever one’s view of their wisdom, were promulgated through notice-and-comment rulemaking in accordance with the Administrative Procedure Act. To erase this edifice not through legislation — which would require the democratic accountability of a congressional vote — but through executive fiat, is to establish a precedent that transcends any single agency or any single administration.
The question before the republic, then, is not merely whether the Consumer Financial Protection Bureau shall survive. It is whether the constitutional order permits a system in which Congress creates, the Court affirms, and the Executive destroys — and whether the American people, who remain the ultimate sovereigns in this arrangement, will tolerate the quiet extinction of institutions built in their name and for their protection. The oral arguments of 2023 are behind us. The ruling of 2024 is on the books. But the deeper constitutional confrontation — the one that will determine whether statutory law means anything at all when an administration decides it does not — is only now arriving at its full and fearsome maturity.