With one decision, the Supreme Court could put the finances of millions of servicemembers and veterans at the mercy of lenders’ greed. If the Court overturns the constitutionality of the Consumer Financial Protection Bureau (CFPB), they are putting the financial well-being of people who served our country on the line.
Last year, the conservative-leaning Fifth U.S. Circuit Court of Appeals ruled that the CFPB’s funding structure violates the Constitution’s Appropriations Clause, which requires all federal spending be approved by Congress. Now, the case – Consumer Financial Protection Bureau v. Community Financial Services Association of America – is set to be argued before the Supreme Court in its next October term.
While the CFPB is best known for returning millions of dollars to working families by combating predatory lenders and businesses, America’s 2 million servicemembers and 16.5 million veterans are among those with the most to lose if the agency loses power.
As a relatively young and financially vulnerable group of Americans, the military community is a prime target for predatory lenders and financial institutions. Additionally, veterans face a unique set of financial challenges — from navigating complex GI Bill benefits to avoiding scams that target their benefits.
That’s why when Congress established the Bureau through Dodd-Frank in 2010, they specifically established an Office of Servicemember Affairs to address the predatory loan practices and unsafe credit products targeted at servicemembers.
To this day, the CFPB remains the only federal financial regulator with an office devoted to addressing the specific threats servicemembers face from the financial industry.
In 2022, credit or consumer reporting issues made up 54% of all service member complaints to the CFPB. Since its inception, the CFPB has analyzed hundreds of thousands of complaints from servicemembers, veterans, and military family members.
Additionally, military consumers reported nearly 50,000 cases of identity theft in 2021 alone. The CFPB has helped servicemembers get their lives back by ensuring that financial institutions take action when military families report identity theft.
The CFPB also helps enforce the Military Lending Act (MLA) – one of the strongest consumer protection laws on the books that provides special protections for active duty servicemembers, such as capping interest rates on many loan products.
An example of the agency’s impact: In 2023, the CFPB found that TitleMax violated the MLA by offering thousands of title loans that exceeded the MLA’s 36% Military Annual Percentage Rate (MAPR) cap. The CFPB ordered TitleMax to stop its unlawful activities, pay $5,050,000 in consumer redress, and pay a $10,000,000 penalty.
Losing the CFPB’s protection isn’t the only reason the military community is concerned about the Fifth Circuit’s potential decision. The U.S. Department of Veterans Affairs (VA) relies on similar funding mechanisms as the CFPB to provide veterans with benefits and services. By arguing that most funding by Congress must be in the form of annual appropriations, the Fifth Circuit’s decision risks the specific funding the VA and similar agencies need to fulfill their obligations to those who served.
In response to the Supreme Court’s looming threat to their financial security and benefits, the Military Officers Association of America (MOAA) and other veteran and service member organizations filed an amicus brief in support of the CFPB and the services it provides to the military community.
If the CFPB’s funding is ruled unconstitutional, those who served our nation will lose security and savings ensured by the agency’s advocacy. The Supreme Court must listen to the voices of our veterans and servicemembers over the voices of the predatory financial industry executives.
Follow us on Twitter for more on the CFPB’s advocacy on behalf of American consumers and read the MOAA’s full amicus brief here.