Funding for Consumer Financial Protection Bureau has Consequences for Housing
In a case that could have significant repercussions for the housing industry, the U.S. Supreme Court on Oct. 3 heard oral arguments in Consumer Financial Protection Bureau (CFPB) v. Community Financial Services Association of America.
The case centers on whether the way the CFPB receives its funding is a violation of the Appropriations Clause of the U.S. Constitution. Congress allows the CFPB to be funded through the Federal Reserve, rather than the annual appropriations process that determines the federal budget.
NAHB joined the Mortgage Bankers Association and the National Association of Realtors to file an amicus brief warning the Supreme Court that the “housing market could descend into chaos” if the high court unwittingly rejected numerous mortgage rules that NAHB’s members rely on to ensure people can purchase homes.
Our coalition’s brief focused on the remedy if the Supreme Court found against CFPB and did not make any arguments concerning the constitutionality of the funding scheme.
The attorneys for both parties received strong questioning from the justices concerning CFPB’s funding and how it could craft a remedy if it found the CFPB’s funding is unconstitutional. Solicitor General Elizabeth Prelogar specifically mentioned NAHB’s brief when she suggested that the Supreme Court could address only the funding — and not the rules — that the CFPB has developed.
Moreover, Justice Sonia Sotomayor stated her concern about the market disruption that would occur if the Supreme Court jettisoned the rules that the mortgage market relies on. The attorney for the Community Financial Services Association (CFSA) suggested that the Supreme Court could stay its decision and send the case to Congress so it could develop a different way to fund the CFPB.
In the end, both liberal and conservative justices seemed to have trouble understanding the CFSA’s argument that the CFPB funding scheme violated the Appropriations Clause. Justice Clarence Thomas specifically commented that it was not enough to argue that Congress has never funded an agency in this manner; there must be a reason why that violates the Constitution.
NAHB expects a decision by early 2024.
Latest from NAHBNow
Jan 16, 2026
Builder Sentiment Loses Ground at Start of 2026Builder confidence in the market for newly built single-family homes fell two points to 37 in January, according to the NAHB/Wells Fargo Housing Market Index (HMI) released today.
Jan 15, 2026
NAHB Participates in Capitol Hill Housing ForumNAHB Chief Lobbyist Lake Coulson participated in a Housing Affordability Roundtable hosted by the New Democrat Coalition. Lawmakers and housing stakeholders discussed ways to address affordability challenges and enact federal housing finance reforms.
Latest Economic News
Jan 16, 2026
December Mortgage Activity Softens Even as Rates EaseMortgage application activity declined in December despite a modest easing in mortgage rates. The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, fell 5.3% from November on a seasonally adjusted basis, though it remained 47.1% higher than a year ago.
Jan 16, 2026
Builder Sentiment Loses Ground at Start of 2026Builder confidence moved lower to start the year as affordability concerns continue to weigh heavily with buyers, and builders continue to contend with rising construction costs.
Jan 15, 2026
Remodeling Market Sentiment Strengthens in Fourth Quarter of 2025In the third quarter of 2025, the NAHB/Westlake Royal Remodeling Market Index (RMI) posted a reading of 64, increasing four points compared to the previous quarter.