Attorney General Aaron M. Frey Joins Multistate Coalition to Urge U.S. Supreme Court to Preserve Consumer Protection Watchdog

May 16, 2023


Contact: Danna Hayes




Attorney General Aaron M. Frey Joins Multistate Coalition to Urge U.S. Supreme Court to Preserve Consumer Protection Watchdog 


Coalition of 24 Attorneys General Stresses that the CFPB Provides Essential Protections for Millions of Americans


AUGUSTA –Attorney General Aaron Frey joined a multistate coalition in submitting an amicus brief to the Supreme Court, urging the Court to overturn a decision of the U.S. Court of Appeals for the Fifth Circuit that threatens the future operation of the Consumer Financial Protection Bureau (CFPB) and the viability of more than ten years of the agency’s regulatory and enforcement actions. The CFPB was set up to create nationwide consumer protection standards and to work with, and supplement, individual state agencies. In Consumer Financial Protection Bureau v. Community Financial Services Association of America, Ltd., the Fifth Circuit concluded that the agency’s operations violate the U.S. Constitution’s Appropriations Clause because it does not receive an annual appropriation from Congress and is instead funded through the Federal Reserve . The court ordered that a payday lending regulation created by the agency be vacated. The coalition of 24 attorneys general, led by New York Attorney General Letitia James, urges the Supreme Court to reverse because the Fifth Circuit’s decision will jeopardize the beneficial consumer protection and regulatory actions taken by the CFPB.  


Banks, lending companies and financial institutions are incredibly sophisticated forces that have the influence and resources to exert significant power over consumers,” said Attorney General Frey. “The Consumer Financial Protection Bureau (CFPB) works to elevate the position of consumers by increasing fairness in the consumer transactions with these financial entities. It would be disastrous for consumers to lose the enforcement and regulatory power of the CFPB.” 


In the aftermath of the 2008 financial crisis, Congress established the CFPB to play a critical role in the stability of key sectors of the financial market and protect consumers against unfair and abusive business practices. Since its establishment, the CFPB has created and enforced nationwide consumer financial standards in areas ranging from mortgage lending requirements to debt-collection practices. Additionally, many CFPB regulations target financial sectors where individual states may face challenges in regulating fraudulent and abusive practices. 


Attorney General Frey and the coalition note that if the appellate court decision takes effect, it could drastically restrict consumer protection efforts in their states and would harm millions of Americans. The Fifth Circuit had invalidated a prior regulation issued by the CFPB, after concluding that the CFPB’s funding was unconstitutional. Attorney General Frey and the coalition caution that this approach, if adopted by the Supreme Court, could result in the invalidation of numerous CFPB rules and other regulatory actions. That result would harm millions of consumers around the country, while destabilizing the consumer financial sector. The amicus brief urges that this result is not mandated by the Constitution. 


Joining Attorney General Frey in filing today’s amicus brief are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Washington, Wisconsin, and the District of Columbia.