Funding for Consumer Financial Protection Bureau has Consequences for Housing

Legal
Published
Contact: Thomas Ward
[email protected]
VP, Legal Advocacy
(202) 266-8230

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.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Economics

Apr 09, 2026

Remodeling Market Sentiment Edges Down but Remains Positive in First Quarter

The National Association of Home Builders (NAHB) released its NAHB/Westlake Royal Remodeling Market Index (RMI) for the first quarter, posting a reading of 62. While this reading is down two points from the previous quarter, it is still solidly in positive territory.

Leadership Meetings | Board of Directors

Apr 08, 2026

Watch Livestream of Virtual Spring Board of Directors Meeting

The NAHB Board of Directors will convene virtually on Tuesday, April 14, at 10 a.m. ET. A livestream is available on nahb.org for NAHB members and HBA executive officers who would like to observe the meeting.

View all

Latest Economic News

Economics

Apr 09, 2026

Remodeling Market Sentiment Edges Down but Remains Positive in First Quarter

In the first quarter of 2026, the NAHB/Westlake Royal Remodeling Market Index (RMI) posted a reading of 62, down two points compared to the previous quarter. Despite this decline, the overall reading has been solidly in positive territory since Q1 2020.

Economics

Apr 08, 2026

Remodelers Saw Profit Margin Gains in 2024

Profitability for residential remodelers reached its highest level in more than two decades in 2024. Industry-wide profit benchmarks are important because they allow companies to evaluate their financial performance in context with the industry.

Economics

Apr 07, 2026

Rising Rates Weigh on Mortgage Activity

Mortgage application activity decreased month-over-month as the 30-year fixed mortgage rate rose. The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, declined 4.3% from February on a seasonally adjusted basis but remained 30.8% higher than a year earlier.