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US

Graham asks Supreme Court to intervene after election ruling

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COLUMBIA, S.C. (AP) — U.S. Sen. Lindsey Graham on Friday asked the U.S. Supreme Court to intervene after a lower court ordered him to testify before a special grand jury in Georgia investigating whether then-President Donald Trump and others illegally tried to influence the 2020 election in the state.

In a filing with the court, attorneys for Graham, a top ally of Trump’s, sought to halt his possible testimony while he continues to appeal the order to appear before the Fulton County special grand jury.

Graham’s office described the South Carolina Republican’s filing as an attempt “to defend the Constitution and the institutional interest of the Senate.” The lower court’s ruling, Graham’s office said, “would significantly impact the ability of senators to gather information in connection with doing their job.”

The legal move is the latest in Graham’s ongoing fight to prevent his testimony in a case that has ensnared allies and associates of the former president. Some have already made their appearances before the special grand jury, including former New York mayor and Trump attorney Rudy Giuliani — who’s been told he could face criminal charges in the probe — attorneys John Eastman and Kenneth Chesebro, and former White House counsel Pat Cipollone.

Paperwork has been filed seeking testimony from others, including former White House chief of staff Mark Meadows, former national security adviser Michael Flynn and former U.S. House Speaker Newt Gingrich.

Graham, a four-term senator who last won reelection in 2020, was first subpoenaed in July by Fulton County District Attorney Fani Willis, who opened her investigation shortly after a recording of a January 2021 phone call between Trump and Georgia Secretary of State Brad Raffensperger was made public. In that call, Trump suggested Raffensperger could “find” the votes needed to overturn his narrow loss to Democrat Joe Biden.

Willis wants to question Graham about two phone calls he made to Raffensperger and his staff in the weeks after the election.

During those calls, Graham asked about “reexamining certain absentee ballots cast in Georgia in order to explore the possibility of a more favorable outcome for former President Donald Trump,” Willis wrote in a petition seeking to compel his testimony.

Graham also “made reference to allegations of widespread voter fraud in the November 2020 election in Georgia, consistent with public statements made by known affiliates of the Trump Campaign,” she wrote. She said in a hearing last month that Graham may be able to provide insight into the extent of any coordinated efforts to influence the results.

Raffensperger said he took Graham’s question about absentee ballots as a suggestion to toss out legally cast votes. Graham has dismissed that interpretation as “ridiculous.” Graham has also argued that the call was protected because he was asking questions to inform his decisions on voting to certify the 2020 election and future legislation.

Graham challenged his subpoena in federal court, but a judge refused to toss it out. Graham then appealed to the 11th U.S. Circuit Court of Appeals, and a three-judge panel ruled Thursday in favor of Willis. Graham can appeal to the full court.

Graham’s lawyers argued that the Constitution’s speech or debate clause, which protects members of Congress from having to answer questions about legislative activity, shields him from having to testify.

Graham is represented by former White House counsel Don McGahn, who was involved in a lengthy court fight over a congressional subpoena for his own testimony related to special counsel Robert Mueller’s investigation of Russian interference in the 2016 election. After years of back-and-forth, the two sides reached an agreement and McGahn answered investigators’ questions in a private session.

Graham’s filing Friday was directed to Justice Clarence Thomas, who handles emergency appeals from Georgia and several other Southern states. Thomas can act on his own or refer the matter to the full court.

Trump’s lawyers recently submitted a Supreme Court application to Thomas asking the Supreme Court to step into a legal fight over the classified documents seized during an FBI search of Trump’s Florida estate.

Thomas has previously come under scrutiny for his vote in a different Trump documents case, in which he was the only member of the court to vote against allowing the House committee investigating the Jan. 6, 2021, Capitol riot to obtain Trump records held by the National Archives and Records Administration.

Thomas’ wife, Virginia “Ginni” Thomas, is a conservative activist and staunch Trump supporter who attended the Jan. 6 “Stop the Steal” rally on the Ellipse and wrote to Meadows in the weeks following the election encouraging him to work to overturn Biden’s victory and keep Trump in office.

She also contacted lawmakers in Arizona and Wisconsin in the weeks after the election, though no evidence has emerged that she contacted Georgia officials. Thomas was recently interviewed by the House committee investigating the Jan. 6 insurrection, and she stood by the false claim that the 2020 election was fraudulent, despite the fact that numerous federal and local officials, a long list of courts, top former campaign staffers and even Trump’s own attorney general have all said there is no evidence of mass fraud.

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Meg Kinnard can be reached at http://twitter.com/MegKinnardAP

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Mark Sherman in Washington contributed to this report.



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US

Appeals court temporarily pauses student loan forgiveness plan

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A federal appeals court Friday is blocking President Biden’s student loan forgiveness program. The 8th Circuit Court of Appeals issued a temporary stay in response to an emergency motion brought by attorneys for several Republican-led states after a lower court ruled that their September lawsuit to stop the debt forgiveness program lacked standing.

In their appeal, the plaintiffs — which include Iowa, Kansas, Missouri, Nebraska, South Carolina and Arkansas — said the forgiveness program will irreparably harm their states’ student loan programs.

“Missouri is harmed from the financial losses that the cancellation inflicts,” the motion read.  

They stay is not based on the merits, but allows for further briefings on the issue next week.

This also comes after the U.S. Supreme Court Thursday declined an emergency appeal by a group of Wisconsin taxpayers who had also challenged the plan in a separate lawsuit.

President Biden announced in August that his administration is canceling up to $20,000 in student loan debt for millions of Americans. Nearly 20 million people will be eligible to have their debt fully canceled under the new plan.


Biden touts student loan forgiveness program ahead of midterm election

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Borrowers who received Pell Grants, which are for low- and middle-income families, can get as much as $20,000 in debt forgiven, while other borrowers can get relief of up to $10,000.

Only individuals who earned less than $125,000 in 2020 or 2021 and married couples with total annual income below $250,000 are eligible for loan relief under the program.

Earlier this week, the U.S. Department of Education formally launched its debt relief application website. It’s unclear how Friday’s ruling will affect the site or the application process. However, White House press secretary Karine Jean-Pierre said in a statement Friday evening that the “temporary order does not prevent borrowers from applying for student debt relief.”

“It also does not prevent us from reviewing these applications and preparing them for transmission to loan servicers,” Jean-Pierre  said. “It is also important to note that the order does not reverse the trial court’s dismissal of the case, or suggest that the case has merit. It merely prevents debt from being discharged until the court makes a decision.”

U.S. Education Secretary Miguel Cardona reiterated that sentiment in his own statement, saying: “today’s temporary decision does not stop the Biden Administration’s efforts to provide borrowers the opportunity to apply for debt relief, nor does it prevent us from reviewing the millions of applications we have received.”

— Robert Legare contributed reporting. 

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US

Appeals court temporarily pauses student loan forgiveness plan

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A federal appeals court Friday is blocking President Biden’s student loan forgiveness program. The 8th Circuit Court of Appeals issued a temporary stay in response to an emergency motion brought by attorneys for several Republican-led states after a lower court ruled that their September lawsuit to stop the debt forgiveness program lacked standing.

In their appeal, the plaintiffs — which include Iowa, Kansas, Missouri, Nebraska, South Carolina and Arkansas — said the forgiveness program will irreparably harm their states’ student loan programs.

“Missouri is harmed from the financial losses that the cancellation inflicts,” the motion read.  

They stay is not based on the merits, but allows for further briefings on the issue next week.

This also comes after the U.S. Supreme Court Thursday declined an emergency appeal by a group of Wisconsin taxpayers who had also challenged the plan in a separate lawsuit.

President Biden announced in August that his administration is canceling up to $20,000 in student loan debt for millions of Americans. Nearly 20 million people will be eligible to have their debt fully canceled under the new plan.


Biden touts student loan forgiveness program ahead of midterm election

04:12

Borrowers who received Pell Grants, which are for low- and middle-income families, can get as much as $20,000 in debt forgiven, while other borrowers can get relief of up to $10,000.

Only individuals who earned less than $125,000 in 2020 or 2021 and married couples with total annual income below $250,000 are eligible for loan relief under the program.

Earlier this week, the U.S. Department of Education formally launched its debt relief application website. It’s unclear how Friday’s ruling will affect the site or the application process. However, White House press secretary Karine Jean-Pierre said in a statement Friday evening that the “temporary order does not prevent borrowers from applying for student debt relief.”

“It also does not prevent us from reviewing these applications and preparing them for transmission to loan servicers,” Jean-Pierre  said. “It is also important to note that the order does not reverse the trial court’s dismissal of the case, or suggest that the case has merit. It merely prevents debt from being discharged until the court makes a decision.”

U.S. Education Secretary Miguel Cardona reiterated that sentiment in his own statement, saying: “today’s temporary decision does not stop the Biden Administration’s efforts to provide borrowers the opportunity to apply for debt relief, nor does it prevent us from reviewing the millions of applications we have received.”

— Robert Legare contributed reporting. 

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US

Graham asks Supreme Court to block his testimony in Georgia 2020 election probe

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Sen. Lindsey O. Graham (R-S.C.) asked the Supreme Court on Friday to block his required appearance before a Georgia grand jury investigating possible attempts by President Donald Trump and his allies to disrupt the state’s 2020 presidential election.

A unanimous three-judge panel of the U.S. Court of Appeals for the 11th Circuit on Thursday turned down Graham’s attempt to block a subpoena from Fulton County District Attorney Fani Willis (D), in which the lawmaker claimed a sitting senator is shielded from testifying in such investigations.

A district court judge had said Graham must appear, but narrowed the range of questions that prosecutors can ask.

Without a stay of the lower courts’ rulings, Graham’s lawyer, Donald F. McGahn, told the Supreme Court, “Sen. Graham will suffer the precise injury he is appealing to prevent: being questioned in state court about his legislative activity and official acts.”

McGahn, a former counsel to Trump, asked Justice Clarence Thomas, the justice designated to hear emergency requests from the 11th Circuit, for at least a temporary stay. He said Graham could be required to testify “in less than a month.”

Thomas could act on the request on his own or refer the matter to the entire court.

Mar-a-Lago classified papers had sensitive secrets about Iran, China

The Atlanta grand jury investigating alleged 2020 presidential election interference has already heard testimony from several Trump lawyers, including Rudy Giuliani, John Eastman and Boris Epshteyn. Willis also wants to question former White House chief of staff Mark Meadows.

Graham would be asked to testify about calls he made to Georgia election officials soon after Trump lost the election to Joe Biden. Prosecutors say Graham has “unique knowledge” about the Trump campaign and the “multistate, coordinated efforts to influence the results” of the election in Georgia and elsewhere.

But Graham has said his actions were legitimate legislative activity protected by the Constitution’s “speech or debate clause.” The senator’s lawyers have said that they have been informed that Graham is a witness — and not a target — of the investigation.

Last month, a district court judge said prosecutors could not question Graham about portions of the calls that were legislative fact-finding. But the judge said Willis’s team could explore coordination with the Trump campaign in its post-election efforts in Georgia, public statements regarding the 2020 election and any efforts to “cajole” or “exhort” Georgia election officials.

The status of key investigations involving Donald Trump

In its order Thursday, the 11th Circuit panel agreed with the lower court judge that those actions “could not qualify as legislative activities under any understanding of Supreme Court precedent.” Two of the three judges on the panel were nominated by Trump.

Graham may still assert his rights, the court noted, if there is a dispute about certain questions.

McGahn said the case should not proceed without the Supreme Court weighing in. “The district court’s refusal to quash or at least stay this impermissible questioning—and the Eleventh Circuit’s cursory acquiescence, while misquoting the ‘Speech or Debate Clause,’ failing to invoke or apply the standard for a stay, and without so much as mentioning sovereign immunity—cries out for review,” he wrote.

McGahn said the district attorney can continue the investigation without Graham by questioning “other witnesses who are not immunized by the United States Constitution.”

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US

Appeals court: Graham must testify in Georgia election probe

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COLUMBIA, S.C. (AP) — U.S. Sen. Lindsey Graham must testify before a special grand jury investigating whether then-President Donald Trump and others illegally tried to influence the 2020 election in Georgia, a federal appeals court said Thursday.

The ruling by a three-judge panel of the 11th U.S. Circuit Court of Appeals paves the way for Fulton County District Attorney Fani Willis to bring Graham in for questioning. She wants to ask the South Carolina Republican about phone calls he made to Georgia Secretary of State Brad Raffensperger in the weeks after the election.

Raffensperger said Graham asked whether he had the power to reject certain absentee ballots, something Raffensperger took as a suggestion to toss out legally cast votes. Graham has dismissed that interpretation as “ridiculous.”

Graham could appeal the ruling to the full appellate court. An attorney for Graham deferred comment Thursday to a spokesperson for the senator’s office, which did not immediately comment on the ruling.

Graham had challenged his subpoena, saying his position as a U.S. senator protected him from having to testify in the state investigation. He has also denied wrongdoing. In a six-page order, the judges wrote that Graham “has failed to demonstrate that this approach will violate his rights under the Speech and Debate Clause.”

Willis opened the investigation early last year, shortly after a recording of a January 2021 phone call between Trump and Raffensperger was made public. In that call, Trump suggested Raffensperger could “find” the votes needed to overturn his narrow loss to Democrat Joe Biden.

Willis requested a special grand jury, saying the panel’s subpoena power would allow the questioning of people who otherwise wouldn’t cooperate with the investigation. She has since filed several rounds of paperwork with the court seeking to compel the testimony of close Trump advisers and associates.

Some of those associates include former White House counsel Pat Cipollone, who has testified before the special grand jury, according to a person familiar with Cipollone’s testimony who spoke to The Associated Press on Thursday on condition of anonymity to discuss a private appearance. Cipollone’s appearance was first reported by CNN.

Cipollone vigorously resisted efforts to undo the election and has said he did not believe there was sufficient fraud to have affected the outcome of the race won by Biden.

Graham was in the first group of people close to Trump whose testimony Willis sought to compel in a batch of petitions filed with the court in early July. He challenged his subpoena in federal court, but U.S. District Judge Leigh Martin May refused to toss out his subpoena. Graham then appealed to the 11th U.S. Circuit Court of Appeals.

Graham’s lawyers argued that the U.S. Constitution’s speech or debate clause, which protects members of Congress from having to answer questions about legislative activity, shields him from having to testify. He contends that the call he made to Raffensperger fare was protected because he was asking questions to inform his decisions on voting to certify the 2020 election and future legislation.

Lawyers on Willis’ team argued that comments Graham made in news interviews at the time, as well as statements by Raffensperger, show that the senator was motivated by politics rather than by legislative factfinding.

They also argued that the scope of the special grand jury’s investigation includes a variety of other topics that have nothing to do with the Raffensperger call. They also want to ask Graham about his briefings by the Trump campaign, including whether he was briefed on the Trump-Raffensperger call, and whether he communicated or coordinated with Trump and his campaign about efforts to overturn the election results in Georgia and elsewhere.

Graham’s lawyers also argued that the principle of “sovereign immunity” protects a U.S. senator from being summoned by a state prosecutor.

Even if the speech or debate clause or sovereign immunity didn’t apply, Graham’s lawyers argued, his status as a “high-ranking official” protects him from having to testify. That’s because Willis has failed to show that his testimony is essential and that the information he would provide cannot be obtained from someone else, they argued.

In their ruling Thursday, the appellate judges ruled that Willis “can ask about non-investigatory conduct that falls within the subpoena’s scope” but “may not ask about any investigatory conduct,” noting that Graham could note any issues over specific areas at the time of his questioning.

Others have already made their appearances before the special grand jury. Former New York mayor and Trump attorney Rudy Giuliani, who’s been told he could face criminal charges in the probe, testified in August. Attorneys John Eastman and Kenneth Chesebro have also appeared before the panel.

Paperwork has been filed seeking testimony from others, including former White House chief of staff Mark Meadows, former national security adviser Michael Flynn and former U.S. House Speaker Newt Gingrich.

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Meg Kinnard can be reached at http://twitter.com/MegKinnardAP

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Associated Press writers Kate Brumback in Atlanta and Eric Tucker in Washington contributed to this report.



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US

Two security incidents occur at Supreme Court in same hour

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There were two security incidents at the U.S. Supreme Court in the same hour Wednesday, CBS News has learned. 

Minutes before guns were seized from a Georgia man’s van near the Supreme Court complex Wednesday afternoon, a California man was arrested for claiming he had “higher authority” and attempting to unlawfully enter the high court’s north door.  

According to newly filed court documents obtained by CBS News, Melvin Marbrey, 73, told Supreme Court police he was at the Court to meet with Chief Justice John Roberts and “would not leave (until) he was allowed into the building.”  According to a police affidavit, Marbrey falsely identified himself as having “higher authority” and showed a congressional report as so-called proof. He told officers, “I’m going inside or you do what you have to do.”

Marbrey was arrested at 3:09 p.m. Wednesday, minutes before a separate security scare, in which police said they found guns in the car of Tony Payne, 80, who was arrested and facing weapons charges. Marbrey’s charging documents do not immediately indicate any connection between the men.

During a court appearance Thursday afternoon, Marbrey said he planned to return to the Supreme Court upon his release. During the proceedings, Marbrey invoked sovereign citizen language, in which he questioned the authority of the court and the Justice Department. When asked to identify his defense attorney by the court, Marbrey responded, “My attorney is the attorney general of the United States. It’s Merrick Garland. This court has no authority.”

The judge issued a stay to order him away from the Supreme Court, to which Marbrey responded, “I’m not going to stay away. I’m going there now.”  He added, “I’m asking you release me right now.”

Meanwhile, Tony H. Payne, whose white minivan was allegedly stopped or searched, at approximately 3:43 p.m. on Wednesday was expected to appear in D.C. Superior Court Thursday afternoon. 

Several guns were recovered and three people were detained when authorities investigated the vehicle near the Capitol, U.S. Capitol Police said Wednesday. The three told officers they were there to deliver documents to the Supreme Court, Capitol Police said.  

Payne, 80, of Tunnel Hill, Georgia, was later arrested on weapons charges, Capitol police said, and his adult grandson was turned over to D.C. Disability Services. A woman who was with them was detained and released.  

Payne is expected to face three charges: unregistered firearm, unregistered ammunition, and carrying a pistol without a license, Capitol Police said.

According to Capitol Police, officers noticed a white van was illegally parked and a police dog alerted the officers, prompting a search. One of the men told officers he had guns, which are still banned on Capitol grounds.

Officers found two handguns and a shotgun in the vehicle, Capitol Police said, along with a pipe and containers. A hazmat team was also called in to search the van.  

The nearby Supreme Court was not open on Wednesday, but the area has been under heightened security. An eight-foot fence that had been erected around the court after several justices received threats this spring was  removed in August.  

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US

Supreme Court rejects request to block Biden student loan debt program

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U.S. Supreme Court Associate Justice Amy Coney Barrett poses during a group portrait at the Supreme Court in Washington, U.S., October 7, 2022. 

Evelyn Hockstein | Reuters

The Supreme Court on Thursday rejected a request to block the Biden administration’s student loan debt relief program.

Justice Amy Coney Barrett denied the emergency application to block the program, which had been filed by a Wisconsin taxpayers’ group on Wednesday.

Barrett is responsible for such applications issued from cases in the 7th Circuit U.S. Court of Appeals, which includes Wisconsin. A notation of her denial on the Supreme Court’s docket does not indicate that she referred the application to the entire Supreme Court before she rejected the request.

The loan relief plan, which is set to begin taking effect this weekend, will cancel up to $20,000 in student debt for millions of borrowers.

More than 8 million individuals submitted applications for the program last weekend after the U.S. Department of Education launched a beta test.

The challenge to the plan came from the Brown County Taxpayers Association in Wisconsin, which had filed a federal lawsuit in that state as part of that effort.

Earlier this month, a U.S. District Court judge dismissed the suit, saying the group lacked legal standing to stall the plan pending the outcome of the case.

The group then appealed that ruling to the 7th Circuit. In its request Wednesday to Barrett, the group asked that she or the entire Supreme Court suspend implementation of the debt relief program pending the outcome of its appeal.

Dan Lennington, deputy counsel of Wisconsin Institute for Law & Liberty, Inc., which acted as lawyers for the taxpapers’ group, in a statement said, “Of course, we are disappointed that the court denied us emergency relief.”

“But that does not make the program lawful,” Lennington said. “Student loan forgiveness will remain under review by the courts and could possibly still be paused as we advocated for this week.”

– CNBC’s Annie Nova contributed to this report

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US

Appeals court rules CFPB funding source unconstitutional

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The Fifth Circuit U.S. Court of Appeals found this week that the funding source for the Consumer Financial Protection Bureau (CFPB) is unconstitutional, according to a decision reached by a three-judge panel.

The panel found that the “design of the CFPB violated the Constitution because it receives funding through the Federal Reserve, rather than appropriations legislation passed by Congress,” reads a story on the decision by Politico. “Democrats established the structure when they created the CFPB in the 2010 Dodd-Frank law as a way to shield the bureau from political pressures that could impact its oversight of the finance industry.”

The panel also vacated a small-dollar lending rule that was enacted in 2017, which had been targeted by payday lending advocates.

The plaintiffs, the Community Financial Services Association of America and Consumer Service Alliance of Texas, argued the CFPB’s payday rule was made arbitrarily and capriciously, and exceeded its statutory authority.

The plaintiffs also challenged the CFPB’s structure, its powers granted by Congress, the director’s protections from removal, claiming they were all unconstitutional.

“Congress’s decision to abdicate its appropriations power under the Constitution, i.e., to cede its power of the purse to the Bureau, violates the Constitution’s structural separation of powers,” the judges wrote.

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The CFPB itself has thus far declined to say whether it will attempt to appeal the decision. However, a CFPB spokesperson told Politico that the ongoing work of the agency will remain unaffected for the foreseeable future.

“[T]here is nothing novel or unusual about Congress’s decision to fund the CFPB outside of annual spending bills,” said CFPB spokesperson Sam Gilford. “Other federal financial regulators and the entire Federal Reserve System are funded that way, and programs such as Medicare and Social Security are funded outside of the annual appropriations process. The CFPB will continue to carry out its vital work enforcing the laws of the nation and protecting American consumers.”

In mid-2020, the United States Supreme Court heard another challenge to the constitutionality of the CFPB and found that while its single-director structure insulating an installed director from firing by the president was unconstitutional, the agency itself would remain intact. This helped lead President Biden to seek the appointment of his own CFPB director upon entering office, and a similar decision swiftly followed from the Supreme Court related to the Federal Housing Finance Agency.

The CFPB currently maintains regulatory enforcement authority over independent mortgage banks, depositories, fintechs and the reverse mortgage industry at the national level.

James Kleimann contributed reporting.

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Business

U.S. consumer protection watchdog’s funding unconstitutional, court rules

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Oct 19 (Reuters) – A federal appeals court ruled on Wednesday that the U.S. Consumer Financial Protection Bureau’s funding apparatus is unconstitutional, faulting a system Democrats designed to insulate the agency from requiring congressional appropriations.

The New Orleans-based 5th U.S. Circuit Court of Appeals ruled that the CFPB’s independent funding through the Federal Reserve rather than budgets passed by Congress violated the separation of powers principles in the U.S. Constitution.

That ruling, by a panel of three judges appointed by then-President Donald Trump, a Republican, in the process vacated a 2017 regulation the agency adopted aimed at combating “unfair and abusive” practices in the payday lending industry.

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The Community Financial Services Association of America sued in 2018 to challenge the rule, which barred lenders from making a new attempt to withdraw funds from an account where two consecutive attempts had failed unless consumers consented.

“Even among self-funded agencies, the Bureau is unique,” U.S. Circuit Judge Cory Wilson wrote. “The Bureau’s perpetual self-directed, double-insulated funding structure goes a significant step further than that enjoyed by the other agencies on offer.”

A CFPB spokesperson said there was “nothing novel or unusual about Congress’s decision to fund the CFPB outside of annual spending bills.”

The bureau could ask the full 5th Circuit to reconsider the case or take it to the U.S. Supreme Court.

Multiple other courts have deemed the CFPB’s funding constitutional, a point the 5th Circuit acknowledged but disagreed with.

The ruling marked the latest in a series of legal challenges to the CFPB, which Congress created in 2010 through the passage of the Dodd-Frank Act during Democrat Barack Obama’s presidency, in response to the 2008 financial crisis.

Republicans have long opposed the agency. The Supreme Court in 2020 ruled in another case that the protection Congress originally afforded the CFPB director, who could only be fired for cause, was unconstitutional.

“Extreme right-wing judges are throwing into question every rule the CFPB enforces to protect consumers and businesses alike,” U.S. Senator Elizabeth Warren, the Massachusetts Democrat who proposed the CFPB’s creation, wrote on Twitter.

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Reporting by Nate Raymond in Boston; Editing by Stephen Coates and William Mallard

Our Standards: The Thomson Reuters Trust Principles.

Nate Raymond

Thomson Reuters

Nate Raymond reports on the federal judiciary and litigation. He can be reached at nate.raymond@thomsonreuters.com.

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Business

Federal Appeals Court Finds CFPB’s Funding Method Unconstitutional

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The Consumer Financial Protection Bureau headquarters in Washington, D.C.



Photo:

Andrew Kelly/REUTERS

WASHINGTON—A federal appeals court found the U.S. Consumer Financial Protection Bureau is funded through an unconstitutional method, a ruling that threw out the agency’s regulation on payday lenders and struck a blow against how the agency operates.

The ruling, by a three-judge panel of the Fifth U.S. Circuit Court of Appeals in New Orleans, found the CFPB’s funding structure violated the Constitution’s doctrine of separation of powers, which sets the authority of the three branches of government. Congress has the sole power of the federal purse, and the bureau’s funding structure undercuts that authority, the court said.

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