The US Consumer Financial Protection Bureau (CFPB) is facing a critical battle for its survival at the Supreme Court. Created by a Democratic-controlled Congress thirteen years ago, the CFPB was established to regulate mortgages and consumer-finance products. However, its existence is now being threatened by payday lenders who are challenging the agency's funding as unconstitutional. The legal battle revolves around whether the agency's funding, which comes from the Federal Reserve, is in violation of the appropriations clause in the Constitution.

The Biden administration argues that the funding structure is valid and necessary for the agency to fulfill its role in protecting consumers. If the Supreme Court rules against the CFPB, it could have wider implications for numerous federal agencies that are also not funded by annual appropriations. Senator Elizabeth Warren warns that a negative decision could have severe consequences for millions of families and the economy. Supporters of the CFPB have filed over 30 friend-of-the-court briefs, including from unexpected groups that typically don't side with regulators. Interestingly, the business world mostly supports the agency.

The Supreme Court's conservative majority is often wary of federal agency authority without specific congressional authorization, making this case a critical test for government regulators. The justices appeared skeptical of the argument put forth by the plaintiffs and questioned whether the appropriation clause was being violated. Ultimately, the decision of the Supreme Court could have far-reaching implications for how government entities are funded, including the Federal Reserve and the Federal Deposit Insurance Corp.