Supreme Court Upholds CFPB Funding, Securing FCRA Enforcer

Case: Consumer Financial Protection Bureau v. Community Financial Services Association of America, Ltd.
Court: Supreme Court of the United States
Citation: 601 U.S. 416 (2024)
Decided: May 16, 2024
Bottom line: The federal agency that supervises the credit bureaus and writes FCRA regulations survived a constitutional challenge to its existence, though its priorities can still change with leadership.

Background

Congress created the Consumer Financial Protection Bureau in the Dodd-Frank Act of 2010 and transferred to it most rulemaking authority under the Fair Credit Reporting Act, the Equal Credit Opportunity Act, and the Fair Debt Collection Practices Act. The CFPB writes Regulation V, which implements the FCRA, supervises the largest credit bureaus and debt collectors, and brings enforcement actions against companies that violate the consumer reporting laws.

Unlike most agencies, the CFPB does not receive an annual appropriation from Congress. The statute instead authorizes the Director to request each year from the Federal Reserve System the amount the Director deems reasonably necessary, up to a cap tied to the Federal Reserve’s 2009 operating expenses and adjusted for inflation.

Trade groups representing payday lenders challenged the CFPB’s 2017 payday lending rule. In 2022 the Fifth Circuit held that the funding mechanism violated the Appropriations Clause, which provides that no money shall be drawn from the Treasury except in consequence of appropriations made by law, and it vacated the rule. That reasoning threatened the validity of every CFPB rule and enforcement action, including those under the FCRA. The Supreme Court granted review.

What the court held

Justice Thomas, writing for seven Justices, reversed. Based on the Constitution’s text, the history of appropriations practice in England, the colonies, and the early Republic, the Court concluded that an appropriation is simply a law that authorizes expenditures from a specified source of public money for designated purposes. The CFPB’s statute does both: it identifies the source (Federal Reserve earnings) and the purpose (carrying out the Bureau’s duties), subject to a cap. That is enough under the Appropriations Clause.

Justice Kagan, joined by Justices Sotomayor, Kavanaugh, and Barrett, concurred to emphasize that the funding structure also fit within later congressional practice. Justice Jackson concurred separately. Justice Alito, joined by Justice Gorsuch, dissented, arguing that the arrangement lets the Bureau escape the control Congress is supposed to exercise through the power of the purse. The case was remanded for further proceedings.

Our take

For people dealing with credit report errors, the decision’s main importance was what it prevented. A ruling for the trade groups could have called into question the CFPB’s Regulation V amendments, its supervision of Equifax, Experian, and TransUnion, and its enforcement orders, and invited defendants in private cases to challenge any regulation the Bureau had issued. We think the majority’s reading is faithful to the text and history of the Appropriations Clause, and the lopsided margin suggests the issue is settled.

It is important to be clear about the decision’s limits. The FCRA’s private right of action does not depend on the CFPB. Consumers sue credit bureaus, screening companies, and furnishers directly under §§ 1681n and 1681o, and those claims would have survived regardless. What the CFPB adds is supervision, rulemaking, and public enforcement, which matter most for systemic problems no single consumer can see.

Later developments: surviving a constitutional challenge did not insulate the CFPB from changes in direction. In May 2025 the Bureau withdrew dozens of guidance documents, including its January 2024 FCRA advisory opinions on background screening and file disclosures (90 Fed. Reg. 20084), and it later replaced its 2022 interpretive rule on FCRA preemption with one taking a much broader view of preemption. Those changes affect guidance and public enforcement, not the statute’s text or consumers’ right to sue.

What it means if your report is wrong

Your ability to sue under the FCRA does not depend on what the CFPB does. You can still file a complaint with the CFPB, which forwards it to the company and often produces a response, but a complaint does not replace a written dispute with the credit bureau, and it does not preserve your legal claims by itself. If an error persists after a dispute, a free case review can assess your options, with no fee unless we win.

Sources

Primary

Opinion (Supreme Court of the United States)

Commentary we reviewed

Updated November 1, 2026. "Our take" is the firm's opinion. This page is general information, not legal advice, and later decisions may change the law.