The Supreme Court’s first week of arguments this term featured a case that could upend the structure of government — and Justice Elena Kagan made that clear Tuesday.
“You’re just flying in the face of 250 years of history,” she told Noel Francisco, who served as Donald Trump’s solicitor general and is now in private practice and pushing to crush the Consumer Financial Protection Bureau on behalf of payday lenders.
"You're flying in the face of 250 years of history." — Justice Kagan to the lawyer arguing against the CFPB pic.twitter.com/7qEWufuPPK
— Demand Justice (@WeDemandJustice) October 3, 2023
And what makes the challenge so radical, as Kagan described?
By way of background, the right-wing 5th U.S. Circuit Court of Appeals broke new ground when it deemed the CFPB’s funding structure unconstitutional. The agency is funded through the Federal Reserve, as opposed to annual appropriations from Congress. The panel of Trump-appointed judges said that setup violates the Constitution’s separation of powers and its Appropriations Clause.
Underscoring the unhinged nature of the ruling, President Joe Biden’s solicitor general, Elizabeth Prelogar, explained at the Supreme Court argument that it’s “the first time any court in our nation’s history has held that Congress violated the Appropriations Clause by enacting a statute providing funding.”
Getting into the practical consequences not only for consumer protection but other government programs too, Kagan told Francisco that it “sure seems that on your view, the Federal Reserve would also be unconstitutional.” Underwhelmed by his attempt to distinguish the CFPB from other agencies that could fall if he wins, Kagan went on to add that “the FDIC, the OCC, they also fail your test.” (The OCC is the Office of the Comptroller of the Currency.)








