According to U.S. Senator Elizabeth Warren, a case that will be heard by the U.S. Supreme Court next week could put Social Security and Medicare, the government’s health insurance programme, in jeopardy as well as expose every federal bank regulator to political inference.
The U.S. Consumer Financial Protection Bureau’s (CFPB) funding is being questioned constitutionally, and the court is scheduled to hear arguments in that regard next week. The case, according to the Biden administration, poses a threat to the agency’s viability, which would impair the federal government’s ability to safeguard financial customers.
Trade associations for the payday lending sector, who launched the lawsuit, contend that the Federal Reserve’s current funding of the Consumer Financial Protection Bureau is in violation of the U.S. Constitution. The CFPB oversees and controls the mortgage origination and payday and title lending sectors of the consumer finance industry.
“The CFPB’s future is at stake in this court decision, along with the future of every other banking regulator,” stated Warren, who assisted in the creation of the CFPB following the 2007–2008 financial crisis.
Warren pointed out that Social Security and Medicare are paid independently of Congress’ annual budget-setting process, as do other banking authorities like the Federal Reserve and the Federal Deposit Insurance Corp.
She said that enabling MPs to determine budgets for those organisations may “evaporate” their political independence. “A bad decision by the Supreme Court could wreck the financial security of millions of families and turn our economy upside down,” she said.