When the Supreme Court decided last week to keep the controversial Consumer Financial Protection Bureau (CFPB) funded, some were surprised that Justice Clarence Thomas split from some of his conservative colleagues, writing the majority opinion to keep the CFPB intact.
In a 7-2 decision, the court held that Congress uniquely authorized the bureau to draw its funding directly from the Federal Reserve System, therefore allowing it to bypass the usual funding mechanisms laid out in the appropriations clause of the Constitution.
The financial watchdog agency bypasses typical congressional appropriations and simply requires the CFPB director to make requests of the Treasury Department for funds as needed. The banking industry parties challenging the CFPB say that is unconstitutional, citing the appropriations clause.
But the high court’s majority disagreed. “In this case, we must decide the narrow question whether this funding mechanism complies with the Appropriations Clause. We hold that it does,” the opinion states.
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“For most federal agencies, Congress provides funding on an annual basis. This annual process forces them to regularly implore Congress to fund their operations for the next year. The Consumer Financial Protection Bureau is different. The Bureau does not have to petition for funds each year. Instead, Congress authorized the Bureau to draw from the Federal Reserve System the amount its Director deems ‘reasonably necessary to carry out’ the Bureau’s duties, subject only to an inflation-adjusted cap,” Thomas explained.
“Although there may be other constitutional checks on Congress’ authority to create and fund an administrative agency, specifying the source and purpose is all the control the Appropriations Clause requires.”
“The statute that authorizes the Bureau to draw money from the combined earnings of the Federal Reserve System to carry out its duties satisfies the Appropriations Clause,” the opinion states.
The banking associations, which sued the CFPB, Thomas writes “offer no defensible argument that the Appropriations Clause requires more than a law that authorizes the disbursement of specified funds for identified purposes.”
But Justices Samuel Alito and Neil Gorsuch strongly dissented, saying, “The Court upholds a novel statutory scheme under which the powerful [CFPB] may bankroll its own agenda without any congressional control or oversight.”
Thomas, in the majority opinion, fired back, “The dissent accepts that the question in this case is ultimately about the meaning of ‘Appropriations.’”
“It faults us for consulting dictionaries to ascertain the original public meaning of that word, insisting instead that ‘Appropriations’ is a ‘term of art whose meaning has been fleshed out by centuries of history,’” Thomas writes.
“But, as we have explained at length, both preratifcation and postratifcation appropriations practice support our source-and-purpose understanding,” he said.
The CFPB has been a thorn in the side of Republicans since Sen. Elizabeth Warren, D-Mass., helped create it after the 2008 market crash in an effort to protect consumers from financial schemes, with authority to regulate banking and lending agencies via federal rules.
President Barack Obama said in 2011 that the agency “was Elizabeth’s idea, and through sheer force of will, intelligence, and a bottomless well of energy, she has made, and will continue to make, a profound and positive difference for our country.”
Former acting CFPB Director Mick Mulvaney during the Trump administration even called the agency “Elizabeth Warren’s baby.”
Warren has been critical of the high court since Trump flipped the ideological majority with his appointments of Justices Amy Coney Barrett, Brett Kavanaugh and Gorsuch. In 2021, she called to expand the court, saying that the current court “threatens the democratic foundations of our nation.”
She’s been directly critical of Thomas, accusing him last year of “corruption” by taking vacations paid for by a GOP mega-donor but not disclosing them. Thomas said he consulted his colleagues and the judicial conference and said he’s followed the ethics rules regarding the reporting of those trips.
Fox News Digital reached out to Warren for comment.
When the high court ruled in the CFPB’s favor last week, she praised it, saying it “followed the law.”
Peggy Little, a senior counsel with the New Civil Liberties Alliance (NCLA) disagreed with the majority’s decision. But she thinks Thomas’ authorship “debunks the idea that all conservatives decide the cases the same way.”
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“I think it’s a healthy corrective to how the media talks about the court,” she told Fox News Digital.
She added that “it would be a mistake for Congress to consider [the decision] a license to set up similar regimes” and that the high court “might revisit it and see the error of its ways.”
David B. Rivkin Jr., an appellate and constitutional law attorney and former White House and Justice Department counsel, says Thomas “marches to the beat of his own drum.”
“The notion that the six conservative justices march in lockstep is absurd,” Rivkin said. “There are distinctive differences not only in how they decide specific cases but in their judicial philosophy. There are numerous permutations of originalism and textualism.”
“Justice Thomas does what he thinks is right, follows the text and its original intent when it was written, and doesn’t mind if he’s the only dissenting justice,” John Shu, a constitutional lawyer who worked for both Bush administrations, told Fox News Digital.
Shu co-authored the first white paper criticizing the leadership structure and funding mechanism of the CFPB with former White House counsel Ambassador C. Boyden Gray in 2010.
“If other justices decide to agree with him, that’s nice, though he’s willing to go it alone,” Shu observed. “Justice Thomas is a true originalist and textualist, as is Justice Alito, and in this case, they interpret the term ‘appropriations’ in different ways, which further proves that the justices do not vote in lockstep as some erroneously claim.”
“Neither Justice Alito nor Justice Thomas are results-oriented, meaning that they do not begin with a preferred outcome in mind and try to come up with some kind of justification later,” Shu explained.
“Instead, they go where the law’s text and original intent take them, and they don’t concern themselves with political outcomes or backlashes, which is one of the reasons why the Constitution gives federal judges lifetime appointment, to insulate their jobs from political whims,” he said.
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