THE LATEST: On May 15, 2023 on behalf of a coalition of organizations including Farm Action, HEAL Food Alliance, Institute of Agriculture and Trade Policy, Rural Coalition, and Partners for Rural Transformation, Democracy Forward filed a brief in the Supreme Court in Consumer Financial Protection Bureau v. Community Financial Services Association of America.
The brief urges the Court to reverse the decision of the Fifth Circuit and reaffirm that the Appropriations Clause does not bind Congress to funding agencies only through the annual appropriations process.
The Farm Credit System (FCS) provides crucial support to the agricultural sector, including by supplying much-needed loans to our nation’s farmers. It is a complex farm loan regulatory system designed to protect our nation’s farmers and food system.
Both the FCS and the Consumer Finance Protection Bureau (CFPB) are critical to the health of the agricultural sector. The FCS is the biggest provider of agricultural credit in the country. The FCA helps insulate our nation’s food system from economic shocks through careful management of the FCS, unburdened by the inconstant promise of annual appropriations. The CFPB analyzes and addresses issues related to the financial products and credit markets on which agricultural producers rely. Specifically, the CFPB has helped illuminate the discrimination and geographic isolation small farms and marginalized farmers face.
Farmers rely on a variety of credit products. When times are tough, and farmers face foreclosure on their FCS loans, many turn to other sources of credit to avoid losing their farms. Many farmers, including those represented by the Amici, are forced to turn to predatory payday lenders—lenders that, but for the Fifth Circuit’s opinion, would be regulated by the rule promulgated by the CFPB that is at issue in this case. The FCA and CFPB, therefore, act alongside each other to ensure the safety and stability of the agricultural credit ecosystem.
But the Fifth Circuit’s erroneous decision casts a cloud over the FCA, and by extension the entire Farm Credit System. The Fifth Circuit’s decision is unbounded by the text of the Appropriations Clause, by precedent, and by practical consideration of its potential ripple effects. Several of the features of the CFPB’s funding structure that the Fifth Circuit identified as problematic are shared by the FCA, the FCS’s administrative arm. Similar to the CFPB, Congress decided to fund two institutions within the Farm Credit System—the Farm Credit Administration and Farm Credit System Insurance Corporation (FCSIC)—not through annual appropriations bills, but by authorizing them to levy assessments on institutions within the FCS. These funding structures too are “authorized by a statute,” so they too satisfy the Appropriations Clause because they were authorized by a statute–which is all that the Appropriations Clause demands.