The CFPB’s Big Win

No doubt you’ve heard about the Supreme Court’s landmark CFPB ruling. (We can confirm it was a small-talk topic of at least one Northeastern wedding over the weekend.) And no matter your opinion on the opinion, you are likely to agree that last week’s decision was a significant moment in the ongoing debate over the state of regulatory power and financial oversight. 

As reactions to the high court upholding the CFPB’s funding mechanism poured in, the Insider took note of some key implications for banks: 

• CFPB Certainty: The agency’s ability to operate without the threat of funding cuts removes the uncertainty surrounding the CFPB’s future, enabling it to resume and potentially intensify its regulatory and enforcement actions. This includes moving forward with delayed regulations such as credit card late-fee caps and payday lending rules.  
• Potential for New Regulations: The CFPB, which has hinted it will beef up staff, is likely to introduce new rules in line with its stated aim of protecting consumers from predatory practices. Upcoming regulations might target high-cost lending practices, overdraft fees, and transparency in financial products. 
• More Legal Challenges: While the Supreme Court ruling secures the CFPB’s funding structure, it does not eliminate future legal battles. Business groups and conservatives are expected to continue challenging the agency’s actions, indicating that some roadblocks and litigation risks remain for the agency. 
• Continued Stability, Predictability: With “boring” banking in vogue, some in the industry view the ruling in a positive light simply because it ends the uncertainty over the CFPB’s future, thus providing a stable regulatory environment where banks can operate without fear of a sudden invalidation of rules. 

What are your thoughts on the ruling? We’d like to know. Email us at insider@rmahq.org.