Washington, D.C. A broad coalition of organizations representing agricultural and rural communities submitted a brief to the Supreme Court of the United States (SCOTUS) supporting the constitutionality of the Consumer Financial Protection Bureau’s (CFPB)  funding structure. The coalition’s brief explains the Fifth Circuit’s opinion in CFPB v. Community Financial Services Association of America – which held that the CFPB’s funding structure violates the Appropriations Clause of the U.S. Constitution – could undermine the funding structures of myriad federal agencies, including the Farm Credit Administration (FCA), and thus threaten the U.S.’s agriculture sector. 

The coalition–Farm Action, the HEAL Food Alliance, the Institute for Agriculture and Trade Policy, Partners for Rural Transformation, and the Rural Coalition–is represented by Democracy Forward.

The coalition’s brief warns that the Fifth Circuit’s unprecedented opinion produced a novel, indeterminate test for whether a federal agency’s funding structure violates the Appropriations Clause; upholding that ruling could threaten the existence of any agency Congress has chosen to fund in a way other than through annual appropriations legislation, thereby saddling the country with uncertainty in many sectors. Several of the features of the CFPB’s funding structure that the Fifth Circuit identified as problematic are shared by the FCA, the administrative arm of the Farm Credit System. The Farm Credit System provides crucial support to the agricultural sector, including by supplying much-needed loans to our nation’s farmers. 

“The Consumer Financial Protection Bureau’s independent funding structure is constitutional,” said Skye Perryman, President and CEO of Democracy Forward. “Our brief explains that the Fifth Circuit’s ruling has no basis in the text of the constitution or legal precedent as well as outlines the severe harms that would ensue if the decision is not overturned. We urge the Supreme Court to overturn the Fifth Circuit’s ruling that risks creating a domino effect that could topple myriad other federal agencies, including the Farm Credit Administration, and threaten our country’s entire agricultural sector in the process.”

“Farmers and rural communities are invaluable contributors to the nation’s food supply, and we urge the Supreme Court to not let us become collateral damage in the effort to undermine consumer protections,” said Joe Maxwell, President of Farm Action. “Farmers rely on the Farm Credit Administration and Consumer Financial Protection Bureau to ensure the safety and stability of the agricultural credit ecosystem.  Nothing less than a fair, inclusive, and competitive food and agriculture system is at stake in this case.”

“The Consumer Financial Protection Bureau is critical to ensuring that everyone, including rural families and communities, is able to thrive,” said Maleeka Manurasada, National Organizer at the HEAL Food Alliance. “We’ve heard directly from countless small farmers about the devastating impact that discriminatory lending has had on their businesses and their communities, and know the CFPB is working hard to hold banks accountable to upholding fair  and competitive markets, address discrimination, and to help family farmers receive the loans they need to succeed.”

“Congress determined the funding structure of the Consumer Financial Protection Bureau in the ‘Consumer Financial Protection Act of 2010’,” said Steve Suppan, Senior Policy Analyst at the Institute for Agriculture and Trade Policy. “If the Court upholds the Fifth Circuit ruling and undermines this congressional determination, any agency whose activities are opposed by a plaintiff can be crippled under the guise of arguing that its funding structure is unconstitutional. For example, if Farm Credit Administration regulations or bank examination practices were opposed by a well-funded plaintiff, there is no legal reason that the Fifth Circuit ruling could not be used to attack FCA’s self-funding structure.”

“The Partners for Rural Transformation (PRT) believe strongly that the CFPB is funded constitutionally,” said Jose Quinonez, President of PRT. “At PRT, we work tirelessly to eliminate negative stereotypes, break down structural barriers of discrimination, and mobilize capital to rural and persistently poor communities across the country. With there already being an astounding inequity of rural America’s access to capital, it is essential we have agencies like the CFPB working to ensure that our areas, which are already under-banked or unbanked completely, are receiving fair financial services and that predatory lenders are not taking over and forcing poverty to perpetuate in these communities. While the decision could potentially affect the funding structures of several federal agencies, it has a significant threat to a major agency that serves rural, and a myriad of other agencies that promote rural well-being. 

If you wear clothes and eat food, you are benefitting from investment in our rural areas. We need agencies like the CFPB, which does not violate the Appropriations Clause, to continue to invest in rural so these people can continue to serve the country. Investing in and upholding the CFPB is investing in the nation.”

 “Rural Coalition and our members have worked for decades to strengthen rural agriculture with a critical focus on equitable access to credit and building a new generation of diverse producers—producers whose very future in farming is inextricably linked to the outcome of this case,” said Rural Coalition Chair Person John Zippert who is also Director of Programs Emeritus of the Federation of Southern Cooperatives based in Epes, AL.  “In an agricultural system that is both volatile and unfair, farmers and other underbanked and unbanked rural families need the protections CFPB offers to preserve credit access and protect them from the abuses of payday lending and other unfair lending practices.