Amicus Curiae Brief — Consumer Financial Protection Bureau, et al., Petitioners v. Community Financial Services Association of America, Limited, et al.

Supreme Court briefMay 15, 2023

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No. 22-448

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In The

Supreme Court of the United States

---------------------------------♦--------------------------------CONSUMER FINANCIAL

PROTECTION BUREAU, ET AL.,

Petitioners,

COMMUNITY FINANCIAL SERVICES ASSOCIATION

OF AMERICA, LIMITED, ET AL.,

Respondents.

---------------------------------♦--------------------------------On Writ Of Certiorari To The

United States Court Of Appeals

For The Fifth Circuit

---------------------------------♦--------------------------------BRIEF OF 90 STATE AND LOCAL

NONPROFIT ORGANIZATIONS AS AMICI CURIAE

IN SUPPORT OF PETITIONERS

---------------------------------♦--------------------------------SETH E. MERMIN

Counsel of Record

DAVID S. NAHMIAS

AYESHA K. RASHEED

CENTER FOR CONSUMER LAW &

ECONOMIC JUSTICE

UC BERKELEY SCHOOL OF LAW

308 Law Building

Berkeley, CA 94720-7200

(510) 393-8254

tmermin@law.berkeley.edu

May 15, 2023

================================================================================================================

COCKLE LEGAL BRIEFS (800) 225-6964

WWW.COCKLELEGALBRIEFS.COM

TABLE OF CONTENTS

Page

INTEREST OF AMICI CURIAE .........................

SUMMARY OF ARGUMENT ..............................

ARGUMENT ........................................................

II.

State Constitutions’ Appropriations Provisions Mirror The Text And Principles

Of The U.S. Constitution ...........................

Numerous State Agencies Across The

Nation Mirror The CFPB In Their Funding

Structure And Ultimate Accountability To

The Legislature .......................................... 10

A. State Legislatures Regularly Establish

Independently Funded Agencies that

Fully Accord With the Requirements

of the State’s Appropriations Clause .... 11

1. Many state financial regulators

are independently funded to

protect financial institutions and

consumers ....................................... 11

2. Many natural resources and agricultural regulators are independently funded to promote farming,

recreation, and conservation .......... 16

3. Many occupational regulators are

independently funded to supervise

the professions ................................ 19

TABLE OF CONTENTS—Continued

Page

4. Just as the laws creating these

independently funded agencies

comply with the relevant state

appropriations clauses, so the

Dodd-Frank Act establishing the

CFPB complies with the Appropriations Clause of the U.S.

Constitution .................................... 21

B. Consistent With Constitutional Requirements, States Ensure that Independently

Funded Agencies Remain Accountable

to the Legislature ................................. 22

III.

Because State Courts Interpreting Their

Own Constitutions Follow This Court’s

Appropriations Jurisprudence, A Ruling

Disapproving The CFPB’s Funding Structure

Could Hobble Agencies Throughout The

States ......................................................... 26

CONCLUSION..................................................... 29

APPENDIX

List of Amici Curiae ............................................ App. 1

iii

TABLE OF AUTHORITIES

Page

FEDERAL CASES

CFPB v. Law Offs. of Crystal Moroney, P.C., 63

F.4th 174 (2d Cir. 2023) ....................................... 7, 22

Chiafalo v. Washington, 140 S. Ct. 2316 (2020) .........10

Cincinnati Soap Co. v. United States, 301 U.S.

308 (1937) ..................................................................7

Cmty. Fin. Servs. Ass’n of Am., Ltd. v. CFPB, 51

F.4th 616 (5th Cir. 2022) .........................................25

INS v. Chadha, 462 U.S. 919 (1983) ................. 9, 24, 27

Int’l Union, United Auto., Aerospace & Agric.

Implement Workers of Am. v. Donovan, 746

F.2d 855 (D.C. Cir. 1984) ...........................................8

Johanns v. Livestock Mktg. Ass’n, 544 U.S. 550

(2005) .......................................................................24

Lincoln v. Vigil, 508 U.S. 182 (1993)...........................25

NLRB v. Noel Canning, 573 U.S. 513 (2014)..............10

OPM v. Richmond, 496 U.S. 414 (1990) ............. 5, 8, 21

Reeside v. Walker, 52 U.S. 272 (1850) .........................27

United States v. Richardson, 418 U.S. 166

(1974)...................................................................... 9

CONSTITUTIONAL PROVISIONS

U.S. Const. art. I, § 9, cl. 7......................................... 2, 9

TABLE OF AUTHORITIES—Continued

Page

STATE CASES

Book v. State Off. Bldg. Comm’n, 149 N.E.2d 273

(Ind. 1958) ...............................................................26

Campbell v. Comm’rs of State Soldiers’ & Sailors’

Monument, 18 N.E. 33 (Ind. 1888) ............................6

Carey v. State ex rel. Dep’t of Fin. Insts., 213

N.E.2d 131 (Ind. 1938) ............................................12

Chez ex rel. Weber Coll. v. Utah State Bldg.

Comm’n, 74 P.2d 687 (Utah 1937) ............................2

Colbert v. State, 39 So. 65 (Miss. 1905) ........................2

Commonwealth v. Sessoms, 532 A.2d 775 (Pa.

1987) ........................................................................26

Fletcher v. Commonwealth, 163 S.W.3d 852 (Ky.

2005) ..........................................................................5

Haw. Insurers Council v. Lingle, 201 P.3d 564

(Haw. 2008) ..............................................................14

Holmes v. Olcott, 189 P. 202 (Or. 1920) .................. 5, 27

Journal Pub. Co. v. Kenney, 24 P. 96 (Mont. 1890)........27

Mandel v. Myers, 629 P.2d 935 (Cal. 1981) ................27

Meyer v. Riley, 38 P.2d 405 (Cal. 1934) ........................5

Nat’l Biscuit Co. v. State, 135 S.W.2d 687 (Tex.

1940) .................................................................... 6, 15

Neeley v. W. Orange-Cove Consol. Indep. Sch.

Dist., 176 S.W.3d 746 (Tex. 2005) ...........................26

O’Brien v. State, 711 P.2d 1144 (Wyo. 1986) ..............16

TABLE OF AUTHORITIES—Continued

Page

Op. to the Governor, 88 A.2d 167 (R.I. 1952) ................2

Orbison v. Welsh, 179 N.E.2d 727 (Ind. 1962) ........ 6, 15

Pickle v. Finley, 44 S.W. 480 (Tex. 1898) ......................6

Rios v. Symington, 833 P.2d 20 (Ariz. 1992) ................6

Ristine v. State, 20 Ind. 328 (1863)...............................7

Robison v. Dwyer, 364 P.2d 521 (Wash. 1961) ............18

Shattuck v. Kincaid, 49 P. 758 (Or. 1897) .....................7

State ex rel. Henderson v. Burdick, 33 P. 125

(Wyo. 1893) .......................................................6-8, 27

State ex rel. Noonan v. King, 67 S.W. 812 (Tenn.

1902) .................................................................. 4, 5, 7

State ex rel. Norfolk Beet-Sugar Co. v. Moore,

69 N.W. 373 (Neb. 1896) ........................................ 6, 7

State v. Clausen, 162 P. 1 (Wash. 1917) ........................7

Thomas v. Owens, 4 Md. 189 (1853) .............................8

Wash. State Legis. v. Inslee, 498 P.3d 496 (Wash.

2021) ..........................................................................9

STATE CONSTITUTIONAL PROVISIONS

Ind. Const. art. 10, § 3 ........................................ 3, 5, 16

Neb. Const. art. III, § 25 ..................................... 3, 5, 15

Or. Const. art. IX, § 4 .............................................. 4, 20

Tenn. Const. art. II, § 24 ......................................... 5, 16

Tex. Const. art. VIII, § 6 ................................... 4, 15, 20

TABLE OF AUTHORITIES—Continued

Page

Wash. Const. art. VIII, § 4 ...................................... 5, 18

Wyo. Const. art. 3, § 35 ........................................... 5, 18

STATUTES

12 U.S.C. § 16 ................................................................4

12 U.S.C. §§ 243-244 ............................................... 4, 21

12 U.S.C. §§ 481-482 .....................................................4

12 U.S.C. § 1815(d) ........................................................4

12 U.S.C. § 1820(e) ........................................................4

12 U.S.C. § 5496 ..........................................................24

12 U.S.C. § 5496a ........................................................24

12 U.S.C. § 5497(a)(1) ........................................... 21, 22

12 U.S.C. § 5497(a)(5) .................................................24

12 U.S.C. § 5497(b)(1) ........................................... 21, 22

12 U.S.C. § 5497(b)(2) .................................................21

12 U.S.C. § 5497(c)(1) ..................................................21

12 U.S.C. § 5497(c)(2) ..................................................21

12 U.S.C. § 5497(d)(1) ........................................... 21, 22

12 U.S.C. § 5497(d)(3) .................................................21

12 U.S.C. § 5497(e)(4) ..................................................24

12 U.S.C. § 5511 ..........................................................22

15 U.S.C. § 1704(b) ......................................................22

31 U.S.C. § 5134(c) ........................................................4

vii

TABLE OF AUTHORITIES—Continued

Page

39 U.S.C. § 2401 ............................................................4

Ind. Code § 28-11-1-1 ..................................................12

Ind. Code § 28-11-1-1(c) ........................................ 12, 16

Ind. Code § 28-11-1-1(e) ........................................ 23, 24

Ind. Code § 28-11-1-2 ..................................................16

Ind. Code § 28-11-1-12 ................................................12

Ind. Code § 28-11-2-9(c)-(f) .........................................15

Ind. Code § 28-11-3-1 ..................................................12

Ind. Code § 28-11-3-5 ..................................................12

Ind. Code § 28-11-4-2 ..................................................12

Neb. Rev. Stat. §§ 8-102–8-108 ...................................15

Neb. Rev. Stat. § 8-601 ................................................15

Neb. Rev. Stat. §§ 8-601–8-606 ...................................14

Neb. Rev. Stat. § 8-603 ................................................15

Neb. Rev. Stat. § 8-604 ................................................15

Or. Rev. Stat. § 182.454 ...............................................20

Or. Rev. Stat. § 182.464 ...............................................23

Or. Rev. Stat. § 182.466(4) ..........................................20

Or. Rev. Stat. § 182.472 ...............................................23

Or. Rev. Stat. § 672.515 ...............................................20

Or. Rev. Stat. § 672.615(1) ..........................................20

Or. Rev. Stat. § 672.705 ...............................................20

viii

TABLE OF AUTHORITIES—Continued

Page

Tenn. Code § 45-1-104 ................................................16

Tenn. Code § 45-1-118 ................................................16

Tenn. Code § 45-1-118(d) ...................................... 14, 15

Tenn. Code § 45-1-118(i)(9) ........................................14

Tenn. Code § 45-1-119(b) ............................................23

Tex. Fin. Code § 14.052 ...............................................13

Tex. Fin. Code § 14.101 ...............................................16

Tex. Fin. Code § 14.102 ...............................................16

Tex. Fin. Code § 14.103 ......................................... 13, 16

Tex. Fin. Code § 14.107(a) ..........................................16

Tex. Fin. Code § 14.110 ...............................................16

Tex. Fin. Code § 14.201 ......................................... 13, 16

Tex. Fin. Code § 14.209 ...............................................13

Tex. Fin. Code § 16.001 ...............................................13

Tex. Fin. Code § 16.001(a) ..........................................13

Tex. Fin. Code § 16.002 ...............................................13

Tex. Fin. Code § 16.003 ...............................................16

Tex. Fin. Code § 16.003(b)-(d) ............................... 14, 15

Tex. Fin. Code § 16.004 ...............................................24

Tex. Fin. Code § 16.005(b) ..........................................23

Tex. Fin. Code § 16.005(c) ...........................................23

Tex. Gov’t Code § 471.110...........................................19

Tex. Gov’t Code § 472.001..................................... 13, 19

TABLE OF AUTHORITIES—Continued

Page

Tex. Gov’t Code § 472.002...........................................19

Tex. Gov’t Code § 472.051..................................... 13, 19

Tex. Gov’t Code § 472.051(b) ......................................19

Tex. Gov’t Code § 472.102(a) ......................................19

Tex. Gov’t Code § 472.103...........................................24

Tex. Gov’t Code § 472.104(a) ......................................23

Tex. Gov’t Code § 472.104(b) ......................................23

Tex. Gov’t Code § 472.110(a) ......................................20

Tex. Occ. Code § 1001.204 ..........................................19

Tex. Occ. Code § 1103.156 ..........................................19

Tex. Occ. Code § 1105.001 .................................... 13, 19

Tex. Occ. Code § 1105.002 .................................... 13, 19

Tex. Occ. Code § 1105.003 ..........................................19

Tex. Occ. Code § 1105.003(b) ................................ 19, 20

Tex. Occ. Code § 1105.003(c) ......................................20

Tex. Occ. Code § 1105.004 ..........................................24

Tex. Occ. Code § 1105.005(b) ......................................23

Tex. Occ. Code § 1105.005(c) ......................................23

Tex. Occ. Code § 1105.011 ..........................................19

Wash. Rev. Code § 15.24.015 ......................................17

Wash. Rev. Code § 15.66.010(23) ................................17

Wash. Rev. Code § 15.66.015 ................................ 17, 18

Wash. Rev. Code § 15.66.030 ......................................17

TABLE OF AUTHORITIES—Continued

Page

Wash. Rev. Code § 15.66.030(4) ..................................17

Wash. Rev. Code § 15.66.055(1) ..................................17

Wash. Rev. Code § 15.66.100 ......................................18

Wash. Rev. Code § 15.66.140 ......................................17

Wash. Rev. Code § 15.66.140(3) ..................................18

Wash. Rev. Code § 15.66.150 ......................................18

Wash. Rev. Code § 15.66.160 ......................................18

Wash. Rev. Code § 15.66.180 ......................................18

Wash. Rev. Code § 15.66.275 ......................................18

Wash. Rev. Code § 15.115.010 ....................................17

Wash. Rev. Code § 43.23.130 ......................................23

Wyo. Stat. § 23-1-103 ..................................................16

Wyo. Stat. § 23-1-201 ..................................................16

Wyo. Stat. § 23-1-302(a) ..............................................18

Wyo. Stat. § 23-1-501(b) ........................................ 17, 18

Wyo. Stat. § 23-1-503 ..................................................23

Wyo. Stat. § 23-6-204(e) ..............................................17

Wyo. Stat. tit. 23, ch. 2 ................................................16

OTHER AUTHORITIES

7 Alexander Hamilton, The Works of Alexander

Hamilton (John C. Hamilton ed. 1851) ....................7

1947 Ind. Op. Att’y Gen. No. 34 (June 18, 1947),

https://perma.cc/XLA8-KEME ................................12

TABLE OF AUTHORITIES—Continued

Page

CFPB, Financial Report of the Consumer Financial Protection Bureau: Fiscal Year 2022

(2022), https://perma.cc/9UMX-9A5J .....................22

GAO, Principles of Federal Appropriations Law

(4th ed. 2016) ................................................... 7, 8, 21

Ind. Dep’t of Fin. Insts., 2021 Annual Report

(2021), https://perma.cc/Q8EH-SCKT .............. 12, 23

Kate Stith, Congress’ Power of the Purse, 97 Yale

L.J. 1343 (1988) .........................................................7

Katherine Clark Harris, The Statement and

Account Clause: A Forgotten Constitutional

Mandate for Federal Reporting, 32 Yale L. &

Pol’y Rev. 505 (2014) .................................................9

Neb. Dep’t of Banking & Fin., Annual Report:

July 1, 2021—June 30, 2022 (2022) https://

perma.cc/MAP3-B882 .............................................14

Office of the Wash. State Auditor, Washington’s

Agricultural Commodity Commissions: An

Assessment of Effectiveness (2023), https://

perma.cc/3ZMB-CMLT ....................................... 17, 18

Or. Legis. Fiscal Office, Review of SemiIndependent Agency Reports (2022), https://

perma.cc/S28K-E6WZ .............................................20

Or. State Bd. of Geologist Exam’rs, About the

Board, https://perma.cc/7ESR-XSEZ ...................20

Report of Study Comm’n for Ind. Fin. Insts.,

77th Gen. Assemb. (Ind. 1932) .......................... 12, 13

xii

TABLE OF AUTHORITIES—Continued

Page

Robert A. Schapiro, Contingency and Universalism in State Separation of Powers Discourse,

4 Roger Williams U. L. Rev. 79 (1998) ....................27

Tenn. Dep’t of Fin. Insts., 2021 Annual Report

(2022), https://perma.cc/87EB-DD5D .....................14

Tex. Legis. Budget Bd., Funds Outside the Treasury: Legislative Policy Report (Feb. 2021),

https://perma.cc/9ZQG-JNFF .................................13

Tex. Office of Consumer Credit Comm’r, About

Us, https://perma.cc/4SUY-VAZQ ...........................13

Wyo. Game & Fish Comm’n, Wyoming Game

and Fish Commission Revenue (Sept. 2020),

https://perma.cc/QS9Q-YJW6 .................................16

INTEREST OF AMICI CURIAE1

Amici curiae submit this brief in support of Petitioners. Amici are ninety state and local nonprofit

organizations located across the country. The legislatures of many of the States in which amici work have

created and maintain regulatory agencies that are financially self-sufficient and do not receive funding

through periodic spending legislation, much like the

Consumer Financial Protection Bureau (CFPB). Amici

appear in this Court to underscore that these agencies’

funding regimes are unremarkable and reasonably

common, and that they comply with the appropriations

provisions of their respective state constitutions. Since

those appropriations clauses are in relevant part identical to their federal counterpart, amici believe that

the foundation and operation of these state-level agencies reflect a consensus among the States that constitutional appropriations provisions permit funding

regimes like that of the CFPB. Further, since state

courts may follow this Court’s guidance in interpreting

their own appropriations provisions, the outcome of

this case may have significant consequences for similarly funded, essential state agencies around the nation.

All amici are listed in the Appendix.

---------------------------------♦--------------------------------1

No counsel for a party authored this brief in whole or in

part, and no person other than amici curiae, their members, or

their counsel made a monetary contribution to the preparation or

the submission of this brief.

SUMMARY OF ARGUMENT

The funding architecture of the Consumer Financial Protection Bureau is neither exceptional nor exceptionable. It is echoed not only among other federal

agencies but also, crucially, in dozens of state agencies

around the country, from Indiana to Wyoming and

Texas to Washington. Because the States have created

these agencies in accordance with state constitutional

appropriations provisions that substantially mirror

the Appropriations Clause of the U.S. Constitution, the

agencies’ existence and continued unchallenged operations reflect an understanding that a funding structure

like that of the CFPB is fully consonant with constitutional separation of powers principles.

States almost universally operate under the same

appropriations framework as the federal Constitution.2 Compare U.S. Const. art. I, § 9, cl. 7 (“No Money

shall be drawn from the Treasury, but in Consequence

Only Mississippi, Rhode Island, and Utah lack a similar

provision in their state constitutions. And even in the absence of

express appropriations provisions, the supreme courts of all three

states have concluded that the state legislature holds the sole

appropriations power. See Op. to the Governor, 88 A.2d 167, 169

(R.I. 1952) (stating that the framers of the Rhode Island Constitution “expressly vested” the “broad and great power” of appropriations in the legislature); Chez ex rel. Weber Coll. v. Utah State

Bldg. Comm’n, 74 P.2d 687, 690 (Utah 1937) (declaring that “the

power of the Legislature on the subject of appropriations is plenary”); Colbert v. State, 39 So. 65, 67 (Miss. 1905) (noting that

although the Mississippi Constitution lacks an “express” appropriations clause, the “Constitution regards the Legislature as the

sole repository of power to make appropriations of moneys to be

paid out of the state treasury”).

of Appropriations made by Law”), with, e.g., Ind. Const.

art. 10, § 3 (“No money shall be drawn from the Treasury, but in pursuance of appropriations made by law”),

and Neb. Const. art. III, § 25 (“No money shall be

drawn from the treasury except in pursuance of a

specific appropriation made by law”). Since long before

the establishment of the CFPB, States have created

regulatory agencies with self-sustaining funding

mechanisms that do not require allocation of taxpayer

money. Like the Bureau, these agencies’ enabling laws

make standing appropriations that designate a funding source and a purpose for the expenditure.

The Bureau’s statutory funding scheme therefore

reflects a regular practice, not only within the federal

government but also among the States, of providing

certain agencies a measure of fiscal autonomy. Funding an agency independent of periodic spending legislation is so unexceptional that, after reviewing records

of all fifty States, amici have not found a single judicial

decision disapproving of this type of funding mechanism as a violation of a State’s appropriations clause.

The absence of such decisions, while not definitive,

bolsters the conclusion that there exists a longstanding and widespread acceptance of agencies operating

under statutory funding mechanisms akin to the Bureau’s. Pursuant to their respective constitutional appropriations provisions, state legislatures have, like

Congress, nearly plenary authority to determine the

method of funding for the agencies they create. And

just as state legislatures have exercised their discretion in determining the appropriate funding regime for

their own agencies, so Congress acted well within its

appropriations authority in designing the CFPB.

---------------------------------♦---------------------------------

ARGUMENT

State Constitutions’ Appropriations Provisions Mirror The Text And Principles Of

The U.S. Constitution.

The longstanding and widespread presence of independently funded regulatory agencies among the

several States strongly suggests that the funding of

the CFPB is neither uncommon nor problematic.3

State legislatures have properly created self-sustaining funding streams for these agencies in accordance

with state appropriations provisions, much as Congress did when it established the CFPB pursuant to

the federal Appropriations Clause. Nearly every

State’s constitution contains a clause with language

that conditions withdrawal of money from the state

treasury on a statutory appropriation. See, e.g., Or.

Const. art. IX, § 4 (“No money shall be drawn from the

treasury, but in pursuance of appropriations made by

law”); Tex. Const. art. VIII, § 6 (“No money shall be

drawn from the Treasury but in pursuance of specific

appropriations made by law”); State ex rel. Noonan v.

Examples also abound of similarly structured federal agencies dating back to the Founding, such as the Federal Reserve,

Federal Deposit Insurance Corporation, Office of the Comptroller

of the Currency, U.S. Mint, and U.S. Post Office. 12 U.S.C. §§ 16,

243-244,481-482, 1815(d), 1820(e); 31 U.S.C. § 5134(c); 39 U.S.C.

§ 2401; see Pet’rs’ Br. at 22-24.

King, 67 S.W. 812, 813 (Tenn. 1902) (noting various

state “constitutional provisions to the effect that no

money shall be drawn from the treasury but in pursuance of appropriations made by law”).4 State constitutions’ appropriations provisions essentially match the

text of the federal Constitution. See, e.g., Holmes v.

Olcott, 189 P. 202, 203 (Or. 1920) (Oregon’s appropriations clause “is identical with that of the federal Constitution and the organic law of numerous states”).5

Like the federal Appropriations Clause, the state

clauses “simply” consist of a “straightforward and explicit command” that “no money can be paid out of the

[state] Treasury unless it has been appropriated by an

act of [the legislature].” OPM v. Richmond, 496 U.S.

414, 424 (1990).

Laws creating independently funded state agencies therefore accord with the principle, including a

centuries-long consensus among state courts, that a

legislature properly makes an appropriation so long as

The States whose self-funded agencies are discussed below

all have appropriations clauses essentially identical to that of the

United States Constitution (as do nearly all the rest of the States).

See Ind. Const. art. 10, § 3; Neb. Const. art. III, § 25; Tenn. Const.

art. II, § 24; Wash. Const. art. VIII, § 4; Wyo. Const. art. 3, § 35.

Accord Fletcher v. Commonwealth, 163 S.W.3d 852, 864

(Ky. 2005) (“Article I, Section 9, Clause 7 of the United States

Constitution contains wording almost identical to that of [Kentucky Constitution] Section 230, and the United States Supreme

Court has consistently given that provision its literal meaning”);

Meyer v. Riley, 38 P.2d 405, 407 (Cal. 1934) (“The limitation that

‘no money shall be drawn from the treasury but in consequence of

appropriations made by law’ is taken literally from the Constitution of the United States”).

it specifies a funding source and authorizes an express

purpose for the funding. See, e.g., Orbison v. Welsh, 179

N.E.2d 727, 736 (Ind. 1962) (“The Legislature must

merely indicate the purpose for which the money is to

be used, the source from which it is to come, and indicate in some manner either the sum to be used or a

method of ascertaining a maximum that may be

used”); Nat’l Biscuit Co. v. State, 135 S.W.2d 687, 693

(Tex. 1940) (“It is sufficient if the Legislature authorizes the expenditure by law, and specifies the purpose

for which the appropriation is made”); State ex rel. Norfolk Beet-Sugar Co. v. Moore, 69 N.W. 373, 373 (Neb.

1896) (“to ‘appropriate’ [under the constitution] is to

set apart from the public revenue a certain sum of

money for a specified object, in such manner that the

executive officers of the government are authorized to

use that money, and no more, for that object, and for no

other”).6 Legislation need not use particular words or

form to constitute a valid appropriation of public funds.

See, e.g., Pickle v. Finley, 44 S.W. 480, 480-81 (Tex.

1898) (“[N]o specific words are necessary in order to

make an appropriation; and it may be conceded, as contended, that an appropriation may be made by implication”); Campbell v. Comm’rs of State Soldiers’ &

Sailors’ Monument, 18 N.E. 33, 34 (Ind. 1888) (“The use

of technical words in a statute making an appropriation is not necessary. There may be an appropriation of

See also Rios v. Symington, 833 P.2d 20, 24 (Ariz. 1992) (appropriations “require the ‘certain sum,’ the ‘specified object,’ and

the ‘authority to spend’ ”); State ex rel. Henderson v. Burdick, 33

P. 125, 126 (Wyo. 1893) (considering “how, when, and for what

purposes the public funds shall be applied”).

public moneys to a given purpose without in any manner designating the act as an appropriation”).7 The legislatures retain “discretion in the matter of prescribing

details of expenditures” to design the manner of their

appropriations. Cincinnati Soap Co. v. United States,

301 U.S. 308, 321-22 (1937); see also Ristine v. State, 20

Ind. 328, 338 (1863) (“An appropriation may be made

in different modes”).

So, too, Congress properly effected an appropriation when it provided for the CFPB to achieve its statutory purpose through funds derived from the Federal

Reserve. See CFPB v. Law Offs. of Crystal Moroney,

P.C., 63 F.4th 174, 183 (2d Cir. 2023) (concluding that

Congress’s specification of “ ‘the purpose’ (or ‘object’),

‘limit,’ and ‘fund’ of its appropriation for the CFPB” is

“[c]onsistent with the historical practices of English,

colonial, and state governments” (quoting 7 Alexander

Hamilton, The Works of Alexander Hamilton 532 (John

C. Hamilton ed. 1851))8; GAO, Principles of Federal Appropriations Law 2-23 (4th ed. 2016) (“GAO Redbook”)

(explaining that Congress makes an appropriation “[i]f

the statute contains a specific direction to pay and a

Accord State v. Clausen, 162 P. 1, 4 (Wash. 1917); King, 67

S.W. at 813 (Tenn. 1902); Shattuck v. Kincaid, 49 P. 758, 387 (Or.

1897); Norfolk Beet-Sugar, 69 N.W. at 376 (Neb. 1896); Burdick,

33 P. at 130 (Wyo. 1893).

See also Kate Stith, Congress’ Power of the Purse, 97 Yale

L.J. 1343, 1352 (1988) (“The ‘Appropriations’ required by the Constitution are not only legislative specifications of money amounts,

but also legislative specifications of the powers, activities, and

Purposes . . . for which appropriated funds may be used.”).

designation of the funds to be used”); Pet’rs’ Br. at 2526.9

In the same way that Congress exercised its constitutionally assigned power of the purse when it designated the funding mechanism for the CFPB, state

legislatures exercise their constitutionally allocated

authority when they set up independently funded state

regulatory agencies. State constitutional appropriations provisions are grounded in the same separation

of powers precepts that undergird the federal Appropriations Clause. Compare Richmond, 496 U.S. at 428

(explaining that Congress’s constitutional appropriations power was intended to “assure that public funds

will be spent according to the letter of the difficult

judgments reached by Congress”), with Burdick, 33 P.

at 126-27 (Wyo. 1893) (observing that appropriations

clauses in “nearly every state in the Union . . . were

‘obviously inserted to prevent the expenditure of the

people’s treasure without their consent’ ” (quoting

Thomas v. Owens, 4 Md. 189, 225 (1853))).

See also GAO Redbook at 2-22 (“[A]ny time the Congress

specifies the manner in which a Federal entity shall be funded

and makes such funds available for obligation and expenditure,

that constitutes an appropriation, whether the language is found

in an appropriation act or in other legislation”). The GAO possesses an “accumulated experience and expertise in the field of

government appropriations,” and its opinions warrant “special

weight.” Int’l Union, United Auto., Aerospace & Agric. Implement

Workers of Am. v. Donovan, 746 F.2d 855, 861 (D.C. Cir. 1984)

(Scalia, J.) (internal quotations omitted).

A final principle shared by federal and state appropriations provisions requires that the independently funded agency remain accountable to the

legislature. See INS v. Chadha, 462 U.S. 919, 955 n.19

(1983) (“The Constitution provides Congress with

abundant means to oversee and control its administrative creatures”); Wash. State Legis. v. Inslee, 498 P.3d

496, 587 (Wash. 2021) (explaining that legislative “conditions of expenditure” attached to appropriations “allow the legislature to fulfill its constitutional role and

to check the power of the executive”).10 The CFPB, for

example, must submit three distinct reports every year

to Congress that provide details about its financial condition and budget request and undergo two separate

annual audits; its director must also testify twice a

year before House and Senate committees. Similarly,

the laws that designate separate funding streams for

state agencies also direct those agencies to furnish regular financial reports to the legislature and to undergo

audits. Through such mechanisms, Congress and state

The Statement and Account Clause that immediately follows the Appropriations Clause also “vest[s] in Congress plenary

power to spell out the details of precisely when and with what

specificity Executive agencies must report the expenditure of appropriated funds.” United States v. Richardson, 418 U.S. 166, 178

n.11 (1974); see Const. art. I, § 9, cl. 7 (“[A] regular Statement and

Account of the Receipts and Expenditures of all public Money

shall be published from time to time”); Katherine Clark Harris,

The Statement and Account Clause: A Forgotten Constitutional

Mandate for Federal Reporting, 32 Yale L. & Pol’y Rev. 505, 512,

515 (2014) (“[T]he Clause embodies democratic accountability to

the people” and “compels Congress to actively oversee how the executive uses public funds, thereby effectuating the carefully designed balance of power between the branches”).

legislatures fulfill the fundamental oversight role over

public funds that is core to the appropriations power.

II.

Numerous State Agencies Across The Nation Mirror The CFPB In Their Funding

Structure And Ultimate Accountability To

The Legislature.

Like the shared text and principles of the U.S.

Constitution and the constitutions of the several

States, the prevalence and persistence of independently funded state agencies militate for the validity of the appropriations model that characterizes the

CFPB. See Chiafalo v. Washington, 140 S. Ct. 2316,

2326 (2020) (explaining that “[l]ong settled and established practice may have great weight in a proper interpretation of constitutional provisions” (internal

quotations omitted)); NLRB v. Noel Canning, 573 U.S.

513, 525 (2014) (confirming that “[t]his Court has

treated practice as an important interpretive factor . . .

even when that practice began after the founding era”).

Despite the variety of roles undertaken by these state

agencies and the geographical and political differences

among the several States, all of the agencies discussed

below are—like the CFPB—funded by appropriations

that specify a source of public funds and designate the

particular purposes for which those funds may be

spent. The agencies remain accountable to the legislature—as does the CFPB—through a detailed series of

reporting and auditing requirements.

A. State Legislatures Regularly Establish

Independently Funded Agencies that

Fully Accord With the Requirements of

the State’s Appropriations Clause.

The States have created independently funded

agencies to regulate critical sectors of the economy and

enabled them, as Congress enabled the CFPB, to promulgate regulations, enforce relevant laws, and supervise their particular industries. These agencies operate

via stable independent funding, like the CFPB, without necessitating periodic appropriations legislation.

And each of their statutory funding mechanisms complies, as does that of the CFPB, with the relevant constitutional appropriations requirements.

1. Many state financial regulators are

independently funded to protect financial institutions and consumers.

For decades, numerous States have chosen to uncouple their financial regulatory agencies from legislative budget cycles and instead have designated that

the agencies’ funding come from revenue raised from

financial institutions under their supervision. The

laws enabling these funding mechanisms constitute

proper appropriations and fully adhere to state constitutional appropriations provisions.

For example, the Indiana Department of Financial

Institutions issues rules, investigates consumer complaints, monitors financial institutions, and brings enforcement actions when institutions have engaged in

“unsafe or unsound” financial practices. See Ind. Code

§§ 28-11-1-1, 28-11-1-12, 28-11-3-1, 28-11-4-2; Carey v.

State ex rel. Dep’t of Fin. Insts., 213 N.E.2d 131, 133

(Ind. 1938) (affirming that it was within “legislative

discretion” to vest the Department with authority to

“inspect, supervise, and liquidate financial institutions” in order to “supervise activities that affect the

public welfare”).11 The Department is wholly selffunded through fees paid by supervised financial institutions. Ind. Code §§ 28-11-1-1(c); 28-11-3-5.12 In fact,

the 1932 legislative Study Commission for Indiana Financial Institutions, whose recommendations led to

the Department’s creation, called for funding to come

from “examination and license fees charged the various financial institutions” where “not one cent of the

cost . . . is to be paid by the public” so that the department could “function flexibly and freely.”13 The

See also Ind. Dep’t of Fin. Insts., 2021 Annual Report 6, 17,

20 (2021), https://perma.cc/Q8EH-SCKT.

Ind. Dep’t of Fin. Insts., 2021 Annual Report, supra note

11, at 17 (explaining that the Department “remains a self-funded

(dedicated funds) agency that is entirely supported by fees paid

by the institutions that are regulated and supervised by the Department. . . . Revenue is driven solely from supervision, examination, and license fees that are assessed to those financial

institutions that are regulated by the Department”).

Report of Study Comm’n for Ind. Fin. Insts., 77th Gen. Assemb., at 81, 86 (Ind. 1932); see also 1947 Ind. Op. Att’y Gen. No.

34, 167 (June 18, 1947), https://perma.cc/XLA8-KEME (explaining that the “obvious intention of the Financial Institutions Act

[that created the Department] is to protect the public. Recent

cases have sustained this theory and have justified the action of

the legislature in establishing a method of supervision and

Commission took note of a “custom[ ] among our states

to segregate” banking regulators from other influences

and recommended “[t]he removal of supervision from

partisan control.”14

Texas has nine “self-directed semi-independent

agencies”—of which four are financial regulatory

agencies—that set their own fees, budgets, and performance metrics without funding from periodic spending legislation. Tex. Fin. Code §§ 16.001-16.002; Tex.

Gov’t Code §§ 472.001, 472.051; Tex. Occ. Code

§§ 1105.001-1105.002.15 One such self-directed semiindependent financial regulator, the Office of Consumer Credit Commissioner, like the CFPB enforces

consumer financial protection and conducts consumer

education. Tex. Fin. Code §§ 14.052, 14.103, 14.201.209, 16.002.16 Texas’s financial regulators are

regulation for all the financial institutions organized under the

laws of this state”).

Report of Study Comm’n for Ind. Fin. Insts., supra note 13,

at 79-80; see also id. at 84 (designing the department to be “safeguarded from political domination”).

See also Tex. Legis. Budget Bd., Funds Outside the Treasury: Legislative Policy Report 1 (Feb. 2021), https://perma.cc/

9ZQG-JNFF (noting that state law authorizes funds held outside of the treasury, including those from self-directed semiindependent agencies “without legislative appropriation”).

See also Tex. Office of Consumer Credit Comm’r, About Us,

https://perma.cc/4SUY-VAZQ (last visited May 9, 2023) (“[A]ll

operating funds are received directly from regulated industries;

revenues are used to fund direct and indirect costs”). The other

financial regulators in Texas that are self-directed, semiindependent agencies are the Texas Department of Banking,

Department of Savings and Mortgage Lending, and the Credit

Union Department. Tex. Fin. Code § 16.001(a).

responsible for covering all their “direct and indirect

costs” through the fees, penalties, and charges they

assess, and they “may not directly or indirectly cause

the general revenue fund to incur any cost.” Id.

§ 16.003(b)-(d).

Likewise, both the Nebraska Department of Banking and Tennessee Department of Financial Institutions finance their operations regulating those States’

financial industries solely through service fees and assessments levied on banks. Neb. Rev. Stat. §§ 8-601–8606; Tenn. Code §§ 45-1-118(d), (i)(9).17 See also Haw.

Insurers Council v. Lingle, 201 P.3d 564, 567-68 (Haw.

2008) (approving structure of Hawaii Department of

Commerce and Consumer Affairs, which was designed

to be “financially self-sufficient” and funded by “persons and entities regulated by the [Department] or

who received services from the [Department]” including “assessments, fees, fines, penalties, and reimbursements” that were “not allowed to revert to the general

fund”).

See also Neb. Dep’t of Banking & Fin., Annual Report: July

1, 2021—June 30, 2022, at 5 (2022) https://perma.cc/MAP3-B882

(“[T]he Department does not use taxpayer money; rather we are

cash-funded from assessments and fees for the services we perform”); id. at 14 (“The Department is fully funded by fees received

from the industries it regulates”); Tenn. Dep’t of Fin. Insts., 2021

Annual Report 10 (2022), https://perma.cc/87EB-DD5D (“The Department of Financial Institutions receives no federal or state

taxpayer funds and is fully funded by the fees assessed to the financial institutions regulated and supervised by the Department”).

Notably, revenues earned from independently

funded financial regulatory agencies in Indiana, Nebraska, Tennessee, and Texas all accrue in dedicated

funds apart from the state treasury that only the regulatory agencies may access. Ind. Code. §§ 28-11-2-9(c)(f ); Neb. Rev. Stat. §§ 8-603, 8-604; Tenn. Code § 45-1118(d); Tex. Fin. Code § 16.003(d).

With respect to all the foregoing agencies, the

state legislature made an appropriation and fulfilled

its constitutional appropriations responsibilities—as

Congress did with the CFPB—by selecting a funding

source for the agencies’ operations and directing how

the agencies must use those funds. Those States’ appropriations clauses, like their federal counterpart, require that the legislature designate a purpose for the

use of funds raised by a government agency. See, e.g.,

Orbison, 179 N.E.2d at 736 (Ind. 1962); Nat’l Biscuit,

135 S.W.2d at 693 (Tex. 1940). The Nebraska legislature, for instance, acted in accordance with the State’s

appropriations clause, see Neb. Const. art. III, § 25,

when it directed the Department of Banking and Finance to supervise banks, trust companies, credit unions, building and loan associations, savings and loan

associations, and digital asset depositories; levy assessments on those entities, and conduct rulemaking,

investigations, and other compliance activities with

the funds collected. Neb. Rev. Stat. §§ 8-102–8-108,

8-601. Likewise, the Texas legislature complied with

the Texas appropriations clause, see Tex. Const. art.

VIII, § 6, when it authorized the Consumer Credit

Commissioner to use the fees it assesses to carry out

its consumer education, rulemaking, investigation and

enforcement activities. Tex. Fin. Code § 14.107(a); see

id. §§ 14.101-14.103, 14.110, 14.201, 16.003. See also

Ind. Const. art. 10, § 3 and Ind. Code §§ 28-11-1-1(c),

28-11-1-2 (authorizing state financial institutions’ regulator to administer all relevant laws using fees collected from regulated entities); Tenn. Const. art. II,

§ 24 and Tenn. Code §§ 45-1-104, 45-1-118 (same).

2. Many natural resources and agricultural regulators are independently

funded to promote farming, recreation, and conservation.

Congress’s decision to structure the CFPB’s funding through the Federal Reserve system is also consistent with practices among the States that authorize

stand-alone funding mechanisms for their agencies

enforcing public rights in the natural resources and

agricultural sectors. The Wyoming Game and Fish

Commission, for instance, is granted sweeping authority to regulate hunting and fishing and is “not financed

by state appropriated funds, but primarily from hunting and fishing license fees and some federal grants.”

O’Brien v. State, 711 P.2d 1144, 1149 (Wyo. 1986); see

Wyo. Stat. §§ 23-1-103, 23-1-201; Wyo. Stat. tit. 23,

ch. 2 (setting forth license and other fees for various

hunting and game-related activities).18 The Wyoming

See also Wyo. Game & Fish Comm’n, Wyoming Game and

Fish Commission Revenue (Sept. 2020), https://perma.cc/QS9QYJW6 (“The [Commission’s] revenue is generated from fish and

wildlife constituents, associated federal funding sources, grants,

legislature authorized the Commission to deposit all

revenues collected from fees, licenses, and penalties

into a dedicated “Wyoming game and fish fund.” Wyo.

Stat. §§ 23-1-501(b), 23-6-204(e).

Similarly, the twenty-one agricultural commodity

commissions in the State of Washington are independently funded regulators that develop and promote

agricultural products through coordinated research,

marketing, education, and auditing efforts. Wash. Rev.

Code §§ 15.66.015, 15.66.140.19 The commissions can

also investigate violations of unfair trade practices

under federal and state law, and conduct enforcement

actions. See id. §§15.66.010(23) (defining “unfair

trade practice”), 15.66.030(4) (enabling agricultural

marketing orders to authorize such investigations),

15.66.140(3) (empowering commissions to enforce

donations, and from Commission owned property. The Commission receives no State General Funds”).

See also Office of the Wash. State Auditor, Washington’s

Agricultural Commodity Commissions: An Assessment of Effectiveness 7 (2023), https://perma.cc/3ZMB-CMLT (“Wash. Auditor’s

Report”) (explaining that “Washington’s commodity commissions

support the agriculture industry primarily through promotion,

research and education”). The legislature established certain

commissions by statute—including the first commission, the Apple Commission, in 1937, and the Grain Commission, today the

state’s largest commission. See id.; Wash. Rev. Code § 15.24.015

(creating the Washington Apple Commission “to speak on behalf

of the Washington state government with regard to apples and

apple-related issues”); Wash. Rev. Code § 15.115.010 (creating

the Washington Grain Commission). Alternatively, the Washington State Director of Agriculture is authorized to issue marketing

orders that create specific commissions. Wash. Rev. Code

§§ 15.66.030; 15.66.055(1).

those orders). The commissions are funded almost

exclusively by annual assessments on producers. Id.

§§ 15.66.100, 15.66.275, 15.66.150.20 After the commissions collect each assessment, they can spend revenue

only to carry out prescribed activities. Id. §§ 15.66.275,

15.66.160; see Robison v. Dwyer, 364 P.2d 521, 526

(Wash. 1961) (affirming the constitutionality of the

commissions’ direct collection of commodity assessments).

Like the state financial regulators mentioned earlier, the Wyoming and Washington legislatures acted in

accordance with their States’ constitutional appropriations clauses, see Wash. Const. art. VIII, § 4; Wyo.

Const. art. 3, § 35, when they created the Game and

Fish Commission and the commodities commissions,

respectively. See Wash. Rev. Code § 15.66.015 (empowering Washington commodity commissions to regulate

agricultural activities), id. § 15.66.180 (authorizing

the commissions to spend their assessment revenues

“without the necessity of a specific legislative appropriation”); Wyo. Stat. §§ 23-1-302(a) (setting forth

Wyoming Game and Fish Commission’s powers and

duties to protect wildlife), id. § 23-1-501(b) (empowering the commission to deploy its funds to effectuate its

statutory duties “and for no other purpose”).

See also Wash. Auditor’s Report, supra note 19, at 7 (“Producers are the commissions’ primary source of funding through

the assessments they pay”).

3. Many occupational regulators are

independently funded to supervise

the professions.

Finally, at least two States have established whole

classifications of self-funded professional boards, none

of which has run afoul of constitutional appropriations

provisions. These boards include five of Texas’s “selfdirected semi-independent agencies,” which like

Texas’s financial regulators are funded solely through

fees and assessments on regulated professions. Tex.

Gov’t Code §§ 472.001-472.002, 472.051, 471.110; Tex.

Occ. Code §§ 1105.001-1105.003.21 The boards license

professionals working in the relevant industries, promulgate regulations, and conduct investigative and disciplinary actions. Although they are defined in their

organic statutes as “state agencies,” none of these selfdirected semi-independent agencies may incur costs

accruing to the Texas general fund. Tex. Gov’t Code

§§ 472.051(b), 472.102(a); Tex. Occ. Code §§ 1105.003(b),

1105.011; see, e.g., Tex. Occ. Code § 1001.204 (requiring

the Texas Board of Professional Engineers and Land

Surveyors to set fees at a reasonable rate to cover

its expenses); id. § 1103.156 (same for the Appraiser

Licensing and Certification Board).

Oregon has similarly established “semi-independent state agencies,” which are self-funded through

These boards include the Texas State Board of Public Accountancy, the Board of Professional Engineers and Land Surveyors, the Board of Architectural Examiners, the Appraiser

Licensing and Certification Board, and the Real Estate Commission. Tex. Gov’t Code § 472.001; Tex. Occ. Code § 1105.001.

earned license fees and assessments. Or. Rev. Stat.

§§ 182.454, 182.466(4).22 These agencies also set and

collect fees to carry out their activities after conducting

a public hearing. Id. § 182.466(4). The Oregon State

Board of Geologist Examiners, for example, is a semiindependent state agency that licenses, regulates, and

disciplines geologists in the state; it is funded solely by

fees and civil penalties it exacts in disciplinary actions.

Id. §§ 672.515, 672.615(1), 672.705.23

By specifying that these semi-independent agencies must raise their own revenue for the purposes of

carrying out their statutory responsibilities, the Texas

and Oregon legislatures fulfilled their basic constitutional appropriations mandate. See Or. Const. art. IX,

§ 4; Or. Rev. Stat. § 182.466(4); Tex. Const. art. VIII,

§ 6; Tex. Gov’t Code § 472.110(a); Tex. Occ. Code

§ 1105.003(b)-(c).

See also Or. Legis. Fiscal Office, Review of Semi-Independent Agency Reports 1-2 (2022), https://perma.cc/S28K-E6WZ (“Or.

Semi-Independent Agency Report”). Of the agencies, nine are totally self-funded; two are funded in part through fee assessment

and some general fund revenues or taxes, and one is dependent

on charitable contributions only. Id.

See Or. Semi-Independent Agency Report, supra note 22,

at B-8 (reporting that “[t]he Board [of Geologist Examiners] is

funded by revenue generated from annual renewal fees for registrants, initial registration fees, and application review fees”);

Or. State Bd. of Geologist Exam’rs, About the Board,

https://perma.cc/7ESR-XSEZ (last visited May 9, 2022) (“The

Board is a stand-alone, semi-independent board that operates entirely off fee revenues. The Board does not receive any state general funds”).

4. Just as the laws creating these independently funded agencies comply

with the relevant state appropriations clauses, so the Dodd-Frank Act

establishing the CFPB complies with

the Appropriations Clause of the U.S.

Constitution.

The statutory funding structures of all of these independently financed agencies, spanning multiple

States and industries, are ordinary, unremarkable, and

fully in accord with constitutional appropriations requirements. They also are notably similar to the structure Congress dictated in the Dodd-Frank Act for the

funding of the CFPB.

Congress authorized the Bureau to seek annual

funding up to a specified limit from the Federal Reserve System—which itself raises funds from semiannual assessments levied on banks at a rate “sufficient

to pay its estimated expenses and salaries.” 12 U.S.C.

§§ 243, 5497(a)(1)-(4),(c); see Richmond, 496 U.S. at 424

(“[T]he payment of money from the Treasury must be

authorized by a statute”); GAO Redbook at 2-23.24

The Dodd-Frank Act defines three principal funding

sources for the Bureau: (1) through a transfer of the Bureau’s

requested annual budget up to twelve percent of the Federal Reserve’s total expenses from the Federal Reserve Board of Governors to the CFPB Fund, which is held at the New York Federal

Reserve Bank and from which the Bureau can request funds on a

quarterly basis, 12 U.S.C. § 5497(a)(1), (b)(1)-(2), (c)(1); (2)

through penalties collected from violators of federal consumer financial laws that are deposited in the CFPB’s Civil Penalty Fund,

which is also held at the New York Federal Reserve, 12 U.S.C.

§ 5497(d)(1); and (3) through developer fees assessed pursuant to

Congress also directed the Bureau to expend those

funds for its investigation, rulemaking, education, and

enforcement initiatives to “ensur[e] that all consumers

have access to markets for consumer financial products and services and that markets for consumer financial products and services are fair, transparent, and

competitive.” 12 U.S.C. §§ 5497(a)(1), 5511; see Crystal

Moroney, 63 F.3d at 182 (“Congress prescribed the purpose (or object), limit, and fund of its appropriation for

the CFPB” (internal quotations omitted)). The DoddFrank Act further ordered the Bureau to keep its funds

in the New York Federal Reserve bank, much as the

independent state federal regulators discussed above

are required to segregate their funds from the state

treasury. 12 U.S.C. § 5497(b)(1), (d)(1). Accordingly, the

CFPB’s funding structure matches a widespread funding mechanism enabled by legislatures across the

States.

B. Consistent With Constitutional Requirements, States Ensure that Independently

Funded Agencies Remain Accountable

to the Legislature.

The laws creating the financial, natural resources,

agricultural, and occupational regulatory agencies discussed above comply, as does the Dodd-Frank Act, with

the straightforward constitutional requirements for an

the Interstate Land Sales Full Disclosure Act, 15 U.S.C.

§ 1704(b). See also CFPB, Financial Report of the Consumer Financial Protection Bureau: Fiscal Year 2022, at 74-76 (2022),

https://perma.cc/9UMX-9A5J; Pet’rs’ Br. at 3-4, 25-26.

appropriation: the enabling legislation specifies the

agency’s funding source and the purpose of its spending. The statutes governing these state agencies also

comport, as does Dodd-Frank, with the overarching

separations-of-powers principle at the core of the appropriations power because the laws that created the

agencies ensure that the legislature retains oversight

over the agencies’ operations.

To assure transparency and accountability, independently funded state regulatory agencies are generally required to submit annual or biennial reports to

the legislature detailing their activities and finances.

For example, all nine of Texas’s self-directed semi-independent agencies must furnish biennial reports, including financial audits, and annual budgets to the

legislature and governor. Tex. Fin. Code § 16.005(b)-(c);

Tex. Gov’t Code § 472.104(a)-(b); Tex. Occ. Code

§ 1105.005(b)-(c); see also Or. Rev. Stat. § 182.472 (requiring “semi-independent state agencies” to submit

biennial reports including financial data and budgets

to the Oregon legislature). Other agencies must prepare publicly available annual reports with budget

information. See, e.g., Tenn. Code § 45-1-119(b); Wash.

Rev. Code § 43.23.130; Wyo. Stat. § 23-1-503.25 The

regulatory agencies also must undergo routine audits. See, e.g., Or. Rev. Stat. § 182.464; Ind. Code

See also Ind. Dep’t of Fin. Insts., 2021 Annual Report,

supra note 11, at 17 (declaring that the Indiana Department of

Financial Institutions is “subject to legislative oversight”).

§ 28-11-1-1(e); Tex. Fin. Code § 16.004; Tex. Gov’t Code

§ 472.103; Tex. Occ. § 1105.004.

Just like these state legislatures, Congress directed the CFPB to comply with specific (and analogous) accountability provisions to ensure the necessary

legislative oversight over the Bureau’s activities and

finances. For example, the Dodd-Frank Act requires

the Bureau to annually furnish financial reports to the

House and Senate appropriations committees that detail its financial operating plans and forecasts, its financial condition, and the sources and application of

its funds. 12 U.S.C. § 5497(e)(4); see Pet’rs’ Br. at 4. The

Bureau must also prepare a report twice a year for

two other congressional committees that includes a

justification of the previous year’s budget request; the

Bureau’s Director must then testify before those committees about the report. 12 U.S.C. § 5496. Finally, the

Bureau must order and conduct its own annual independent audit and undergo a separate audit from the

Comptroller General, the latter of which is also submitted to Congress. Id. §§ 5496a, 5497(a)(5).

In addition to its ongoing oversight of the Bureau,

Congress can, of course, alter the Bureau’s funding

scheme through future legislation. See Johanns v. Livestock Mktg. Ass’n, 544 U.S. 550, 563-64 (2005) (“Congress, of course, retains oversight authority, not to

mention the ability to reform the program at any

time”); Chadha, 462 U.S. at 955 n.19 (“Congress ultimately controls administrative agencies in the legislation that creates them”). Thus, the CFPB’s budget is

not “double-insulated” from Congress’s reach, see

Cmty. Fin. Servs. Ass’n of Am., Ltd. v. CFPB, 51 F.4th

616, 639-40 (5th Cir. 2022); to the contrary, Congress

dictated clear procedures to review how the Bureau

uses the funds it generates, see Lincoln v. Vigil, 508

U.S. 182, 193 (1993) (“Congress may always circumscribe agency discretion to allocate resources by putting restrictions in the operative statutes”). Those

procedures are equivalent to the methods of oversight

that independently funded state regulators must follow so that they remain accountable to the legislature.

Accordingly, both Congress and state legislatures

properly exercise the oversight implicit in their constitutional appropriations responsibilities.

In sum, when it created the Bureau, Congress

hewed to a path familiar both to the federal government and the States. Like Congress, the States regularly create independently funded regulatory agencies.

And like the Dodd-Frank Act, the laws funding these

agencies satisfy the straightforward dictates of state

constitutional appropriations provisions because they

designate independent revenue streams and direct the

agencies to use the funds to fulfill an express statutory

mandate. The enabling statutes also provide mechanisms to ensure that the agencies remain accountable

to the legislature.

Just as the state agencies discussed above conform

to the appropriations requirements of their respective

constitutions, so the funding mechanism of the CFPB

adheres to the mandate of the U.S. Constitution’s Appropriations Clause.

III. Because State Courts Interpreting Their

Own Constitutions Follow This Court’s

Appropriations Jurisprudence, A Ruling

Disapproving The CFPB’s Funding Structure Could Hobble Agencies Throughout

The States.

Considering the shared text and history of the federal Appropriations Clause and its analogues in state

constitutions, this Court’s construction of the Appropriations Clause as it applies to the CFPB’s funding

scheme may generate similar interpretations among

the States of their own appropriations provisions. On

separation-of-powers questions, state courts often look

to this Court’s interpretation of the U.S. Constitution

to elucidate their own constitutions. See, e.g., Neeley v.

W. Orange-Cove Consol. Indep. Sch. Dist., 176 S.W.3d

746, 778 (Tex. 2005) (considering this Court’s precedent for “purposes of demarcating the separation of

powers in the federal government under the United

States Constitution” and “[a]ssuming that the same

tests would serve equally well in defining the separation of powers in the state government under the Texas

Constitution”); Book v. State Off. Bldg. Comm’n, 149

N.E.2d 273, 293-96 (Ind. 1958) (observing that the separation of powers is “safeguarded in our Federal Constitution and in the Constitution of every State of the

Union” and applying this Court’s jurisprudence to interpret Indiana law).26

See also Commonwealth v. Sessoms, 532 A.2d 775, 778

(Pa. 1987) (restating analogous provisions in the federal and

Pennsylvania constitutions and concluding that “the foregoing

State courts have historically paid particular heed

to this Court’s appropriations jurisprudence. See, e.g.,

Mandel v. Myers, 629 P.2d 935, 940-41 (Cal. 1981)

(evaluating decisions of this Court to determine that

the judiciary may order payment of funds if already

appropriated by the legislature); Journal Pub. Co. v.

Kenney, 24 P. 96, 97-98 (Mont. 1890) (concluding that

judicial determinations about appropriations principles are “in harmony” with this Court’s then “leading

case” on the matter (interpreting Reeside v. Walker, 52

U.S. 272 (1850))). Given the uniformity of the text and

history of their appropriations clauses, state courts

also have long looked to one another’s constitutional

appropriations precedent. See, e.g., Holmes, 189 P. at

203-04 (Or. 1920) (determining whether an appropriation fulfills the Oregon constitution’s requirements

based on reasoning from the Arkansas, California, Indiana, Nebraska, and Nevada supreme courts); Burdick, 33 P. 127-30 (Wyo. 1893) (consulting cases

interpreting state appropriations provisions by the

Alabama, California, Colorado, Indiana, Louisiana,

Maryland, Montana, and Nebraska supreme courts).

Accordingly, a decision disapproving the funding structure of the CFPB could prompt a seismic shift in over

provisions ‘are integral parts of the constitutional design for the

separation of powers.’ The Supreme Court’s summary of the purpose of these sections may equally be applied to the design of our

Commonwealth government” (quoting Chadha, 462 U.S. at 946));

Robert A. Schapiro, Contingency and Universalism in State Separation of Powers Discourse, 4 Roger Williams U. L. Rev. 79, 87

(1998) (“[S]tate courts often rely heavily on federal precedent and

modes of analysis in addressing the distribution of powers under

state constitutions”).

a century of settled law and careful calibration among

the States.

That States spanning the country, and Congress

with the CFPB and other federal agencies, have each

separately chosen to establish independently funded

agencies to regulate important industries lends credence to the wisdom and propriety of the practice. The

text and principles of the nation’s appropriations

clauses, federal and state alike, afford legislatures the

flexibility to determine different methods for funding a

particular agency and for providing legislative oversight. The evidence from the States suggests that the

Bureau’s funding structure is thus perfectly consistent

with constitutional principles governing appropriations and the power of the purse.

---------------------------------♦---------------------------------

CONCLUSION

For the foregoing reasons, the Court should reverse the judgment of the Court of Appeals.

Respectfully submitted,

SETH E. MERMIN

Counsel of Record

DAVID S. NAHMIAS

AYESHA K. RASHEED

CENTER FOR CONSUMER LAW &

ECONOMIC JUSTICE

UC BERKELEY SCHOOL OF LAW

308 Law Building

Berkeley, CA 94720-7200

(510) 393-8254

tmermin@law.berkeley.edu

Counsel for Amici Curiae

May 15, 2023

APPENDIX TABLE OF CONTENTS

Page

List of Amici Curiae ............................................ App. 1

App. 1

List of Amici Curiae

Alabama Appleseed

Alaska Public Interest Research Group

Arizona PIRG, Inc.

Arkansas Community Organizations

California Public Interest Research Group, Inc.

Casa of Oregon

CASH Campaign of Maryland

Catholic Charities of New Mexico

Ceiba (Pennsylvania)

10. Center for Survivor Agency and Justice (Multistate)

11. Charlotte Center for Legal Advocacy (North Carolina)

12. Chicago Community Loan Fund

13. Children and Family Services, Corp. (Indiana)

14. Colorado Public Interest Research Group, Inc.

15. ConnPIRG Citizen Lobby, Inc. (Connecticut)

16. Consumer Federation of California

17. Consumers Council of Missouri

18. Consumers for Auto Reliability and Safety Foundation (California)

19. Delaware Community Reinvestment Action Council

20. DevNW (Oregon)

21. Economic Action Maryland

22. Fifth Avenue Committee (New York)

App. 2

23. Florida Consumer Action Network

24. FreeFrom (California)

25. Gateway Community Development Corporation

(North Carolina)

26. Georgia Public Interest Research Group, Inc.

27. Greenlining Institute (California)

28. Home Ownership Center of Greater Cincinnati

(Ohio)

29. HomesteadCS (Indiana)

30. Hoosiers for Responsible Lending (Indiana)

31. Housing Action Illinois

32. Illinois State Public Interest Research Group, Inc.

33. Indiana Black Expo, Inc.

34. Indiana Community Action Poverty Institute

35. Indianapolis Urban League (Indiana)

36. Kentucky Equal Justice

37. Legal Aid Chicago

38. Legal Aid Justice Center (Virginia)

39. Long Beach Gray Panthers (California)

40. Maine Center for Economic Policy

41. Manufactured Home Owners Association of New

Jersey, Inc.

42. MaryPIRG Citizen Lobby, Inc. (Maryland)

43. Massachusetts Public Interest Research Group,

Inc.

44. Military / Veterans Coalition of Indiana

App. 3

45. MoPIRG Citizen Organization, Inc. (Missouri)

46. Mountain State Justice (West Virginia)

47. Neighbors Helping Neighbors (New York)

48. New Economy Project (New York)

49. New Jersey Appleseed Public Interest Law Center

50. New Jersey Citizen Action

51. New Jersey Public Interest Research Group Citizen Lobby, Inc.

52. New Mexico Public Interest Research Group

Fund, Inc.

53. New Yorkers for Responsible Lending

54. North Carolina Public Interest Research Group

Citizen Lobby, Inc.

55. Northwest Justice Project (Washington)

56. Ohio PIRG Citizen Lobby, Inc.

57. OneJustice (California)

58. Oregon Consumer Justice

59. Oregon Consumer League

60. Oregon State Public Interest Research Group, Inc.

61. Pacific Community Ventures (California)

62. Pennsylvania Public Interest Research Group, Inc.

63. PIRGIM Public Interest Lobby, Inc. (Michigan)

64. Prosperity Indiana

65. Public Counsel (California)

66. Public Justice Center (Maryland)

67. REBOUND, Inc. (Kentucky)

App. 4

68. South Carolina Appleseed Legal Justice Center

69. South Dallas Fair Park Inner City Community

Development Corporation (Texas)

70. Southwest Center for Economic Integrity (Arizona)

71. Statewide Poverty Action Network (Washington)

72. Tennessee Justice Center

73. Texas Appleseed

74. Texas Public Interest Research Group, Inc.

75. Texas RioGrande Legal Aid

76. The African American Alliance of CDFI CEOs

(Multistate)

77. The Brazos Valley Financial Fitness Center

(Texas)

78. The Middleburg Institute (Louisiana)

79. The One Less Foundation (Pennsylvania)

80. Tzedek DC

81. United Way of Metropolitan Dallas (Texas)

82. Urban Land Conservancy (Colorado)

83. Virginia Citizens Consumer Council

84. Virginia Organizing

85. Virginia Poverty Law Center

86. Voices Organized in Civic Engagement (Oklahoma)

87. Washington State Public Interest Research Group,

Inc.

88. William E. Morris Institute for Justice (Arizona)

App. 5

89. Wisconsin Public Interest Research Group, Inc.

90. Woodstock Institute (Illinois)

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.