The “Dodd-Frank Wall Street Reform and Consumer Protection Act” created a new federal agency called the Bureau of Consumer Financial Protection (the “BCFP”). The statute financed the BCFP’s operations by allowing the agency to draw an unspecified amount of money from an account already accumulated by the Federal Reserve Board from fees and charges the Board collects from commercial banks. A clause in the United States Constitution however says that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law . . . .” U.S. Const., Art. I, § 9, 7th sentence. In Consumer Financial Protection Bureau v. Community Financial Services Ass’n., decided on May 16, 2024, the Court ruled, 7-2, that the statute’s method of financing the operations of an agency of the federal government complied with the “Appropriations Clause” of the federal Constitution. Only Justices Alito and Gorsuch dissented from the decision.
COMMENT: The Court’s decision was wrong. Language in the federal Constitution ought to be construed in accordance with its recognized semantics at the time of its drafting, together with its purpose for being placed in the United States Constitution. An “appropriation” in the context of the United States Constitution as written in 1789 is “The assignment of anything to a special purpose” or “the thing so assigned, or “a sum of money set apart for any purpose.”[1] The statute in question did not “assign” or “set aside” anything in the Federal Reserve Board’s accounts for the Consumer Financial Protection Bureau, even if those accounts could be regarded as part of the federal “Treasury.” In my opinion, the statute’s funding mechanism is unconstitutional. At least it is in the Constitution as that document was actually written in 1789.
Dan Rhea
[1] “Appropriation, N., Sense 3.” Oxford English Dictionary, Oxford UP, September 2023, https://doi.org/10.1093/OED/4465961759.
RECENT RULINGS 