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

No. 22-448

In the Supreme Court of the United States

CONSUMER FINANCIAL PROTECTION BUREAU, ET AL.,

Petitioners,

v.

COMMUNITY FINANCIAL SERVICES ASSOCIATION OF

AMERICA, LIMITED, ET AL.,

Respondents.

On Writ of Certiorari to the U.S. Court of Appeals for the Fifth Circuit

BRIEF OF AMICI CURIAE CREDIT UNION

NATIONAL ASSOCIATION, INC., NATIONAL

ASSOCIATION OF FEDERALLY-INSURED

CREDIT UNIONS, AND AMERICAN ASSOCIATION OF CREDIT UNION LEAGUES IN SUPPORT OF RESPONDENTS AND STAY

LEAH C. DEMPSEY

BROWNSTEIN HYATT

FARBER SCHRECK, LLP

1155 F Street N.W.

Washington, DC 20004

(202) 296-7353

JULIAN R. ELLIS, JR.

Counsel of Record

ROBERT P. BACAJ

BROWNSTEIN HYATT

FARBER SCHRECK, LLP

675 15th Street, Suite 2900

Denver, CO 80202

(303) 223-1100

jellis@bhfs.com

(Counsel listing continues on signature page)

i

QUESTION PRESENTED

Whether the court of appeals erred in holding that

the statute providing funding to the Consumer Financial Protection Bureau (CFPB), 12 U.S.C. 5497, violates the Appropriations Clause, U.S. Const. Art. I,

§ 9, Cl. 7, and in vacating a regulation promulgated at

a time when the CFPB was receiving such funding.

ii

TABLE OF CONTENTS

Page

QUESTION PRESENTED ........................................i

TABLE OF AUTHORITIES ................................... iii

INTEREST OF AMICI CURIAE ............................. 1

SUMMARY OF THE ARGUMENT ......................... 3

ARGUMENT .............................................................. 5

I.

The Bureau’s Scope of Power and Structure

Are Unique in Many Ways—Including Its

Unprecedented Funding Scheme. ........................ 5

A. Congress created a uniquely powerful and

autonomous independent agency. ................. 6

B. The Bureau’s funding scheme is distinct

from other financial agencies. ..................... 10

II. The Court Should Affirm but Stay Its Judgment

So the Political Branches Can Adopt a New

Funding Scheme for the Bureau. ....................... 15

A. Severance cannot save the Bureau. ............ 16

B. The Court should stay its judgment for three

to six months to minimize the disruption

from its constitutional holding. ................... 21

CONCLUSION ......................................................... 27

iii

TABLE OF AUTHORITIES

Page(s)

Cases

Alaska Airlines, Inc. v. Brock,

480 U.S. 678 (1987) ........................................ 16, 17

Ayotte v. Planned Parenthood of N. New

Eng.,

546 U.S. 320 (2006) .............................................. 16

Bowsher v. Synar,

478 U.S. 714 (1986) .............................................. 25

Buckley v. Valeo,

424 U.S. 1 (1976) ............................................ 24, 25

Canning v. NLRB,

823 F.3d 76 (D.C. Cir. 2016) ................................ 26

CFPB v. All Am. Check Cashing, Inc.,

33 F.4th 218 (5th Cir. 2022) .......................... 10, 18

Champlin Ref. Co. v. Corp. Comm’n of

State of Okla.,

286 U.S. 210 (1932) ........................................ 16, 17

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

CFPB,

51 F.4th 616 (5th Cir. 2022) .................... 20, 23, 24

Collins v. Yellen,

141 S. Ct. 1761 (2021) .......................................... 24

Commodity Futures Trading Comm’n v.

Schor,

478 U.S. 833 (1986) .............................................. 22

Doolin Sec. Sav. Bank, F.S.B. v. OTS,

139 F.3d 203 (D.C. Cir. 1998) .............................. 26

iv

TABLE OF AUTHORITIES (con’t)

Dorchy v. Kansas,

264 U.S. 286 (1924) .............................................. 17

FEC v. Legi-Tech, Inc.,

75 F.3d 704 (D.C. Cir. 1996) ................................ 26

Free Enter. Fund v. Pub. Co. Acct.

Oversight Bd.,

561 U.S. 477 (2010) ............................ 10, 16, 20, 27

Hill v. Wallace,

259 U.S. 44 (1922) ................................................ 17

In re Trade-Mark Cases,

100 U.S. 82 (1879) ................................................ 17

INS v. Chadha,

462 U.S. 919 (1983) ........................................ 22, 23

Intercollegiate Broad. Sys., Inc. v.

Copyright Royalty Bd.,

796 F.3d 111 (D.C. Cir. 2015) .............................. 26

Marbury v. Madison,

5 U.S. (1 Cranch) 137 (1803) ......................... 16, 19

Marchetti v. United States,

390 U.S. 39 (1968) ................................................ 20

Massachusetts v. Mellon,

262 U.S. 447 (1923) .............................................. 19

Milliken v. Bradley,

433 U.S. 267 (1977) .............................................. 24

N. Pipeline Constr. Co. v. Marathon

Pipe Line Co.,

459 U.S. 813 (1982) ........................................ 22–26

New Process Steel, L.P. v. NLRB,

560 U.S. 674 (2010) .............................................. 23

v

TABLE OF AUTHORITIES (con’t)

New York v. Cathedral Acad.,

434 U.S. 125 (1977) .............................................. 24

North Carolina v. Covington,

137 S. Ct. 1624 (2017) .......................................... 24

Reynoldsville Casket Co. v. Hyde,

514 U.S. 749 (1995) .............................................. 26

Seila Law LLC v. CFPB,

140 S. Ct. 2183 (2020) .......... 1, 4–10, 14–15, 18–21

United States v. Reese,

92 U.S. 214 (1875) ................................................ 17

Winter v. Nat. Res. Def. Council, Inc.,

555 U.S. 7 (2008) .................................................. 24

Youngstown Sheet & Tube Co. v.

Sawyer,

343 U.S. 579 (1952) .............................................. 23

Constitutional Provision

U.S. Const. art. I,

§ 9, cl. 7 ............................................ i, 2, 4, 8, 10, 27

Statutes

12 U.S.C. § 16 ............................................................ 14

12 U.S.C. §§ 243–244 ................................................ 14

12 U.S.C. § 289(a)(3)(B)............................................. 21

12 U.S.C. §§ 482–483 ................................................ 14

12 U.S.C. § 1752a(b)(1).............................................. 13

12 U.S.C. § 1755(a) .............................................. 11, 12

12 U.S.C. § 1755(b) .................................................... 12

12 U.S.C. § 1755(d)–(e) .............................................. 11

vi

TABLE OF AUTHORITIES (con’t)

12 U.S.C. § 1815(d)(1) ............................................... 14

12 U.S.C. § 1820(e) .................................................... 14

12 U.S.C. § 5491(b)(2) ................................................. 7

12 U.S.C. § 5491(c)(1) .................................................. 7

12 U.S.C. § 5491(c)(3) .................................................. 7

12 U.S.C. § 5496(a)–(b)................................................ 9

12 U.S.C. § 5496(c)(2) .................................................. 9

12 U.S.C. § 5497 ....................................... i, 2, 8, 18, 19

12 U.S.C. § 5497(a) ................................................ 8, 20

12 U.S.C. § 5497(a)(1) ......................................... 20, 21

12 U.S.C. § 5497(a)(2)(C)....................................... 9, 21

12 U.S.C. § 5497(b)(1) ......................................... 20, 21

12 U.S.C. § 5497(c)(1) ...................................... 8, 20, 21

12 U.S.C. § 5511(a) ...................................................... 6

12 U.S.C. § 5514(b) .................................................... 19

12 U.S.C. § 5515(b) .................................................... 19

12 U.S.C. § 5531 ........................................................ 19

12 U.S.C. § 5536(a)(1)(B)............................................. 6

12 U.S.C. § 5562 .......................................................... 7

12 U.S.C. § 5562(b) .................................................... 19

12 U.S.C. § 5563(a) ................................................ 7, 19

12 U.S.C. § 5564(a) ................................................ 7, 19

12 U.S.C. § 5564(a)–(b).............................................. 19

12 U.S.C. § 5564(d) .................................................... 19

vii

TABLE OF AUTHORITIES (con’t)

12 U.S.C. § 5564(f) ....................................................... 7

12 U.S.C. § 5565 ........................................................ 19

12 U.S.C. § 5565(a) ...................................................... 7

12 U.S.C. § 5565(a)(1) ................................................. 7

12 U.S.C. § 5565(c) ...................................................... 7

12 U.S.C. § 5566 ........................................................ 19

12 U.S.C. § 5581(b) .................................................... 18

Consolidated Appropriations Act, 2023,

Pub. L. 117-328, 136 Stat. 4690 .......................... 13

Regulations and Rulemakings

12 C.F.R. § 1081.104 (2023) ........................................ 7

Other Authorities

Alexander Hamilton, Speech on the

Compromises of the Constitution to

the New York Convention (June 24,

1788), in 2 The Works of Alexander

Hamilton 455 (John C. Hamilton ed.,

1850) ..................................................................... 10

Br. of Amicus Curiae Credit Union Nat’l

Assoc., Inc. in Support of Pet’r and a

Stay, Seila Law LLC v. CFPB, 140 S.

Ct. 2183 (2020) (No. 19-7) ...................................... 6

C. Boyden Gray, Extra Icing on an

Unconstitutional Cake Already

Frosted? A Constitutional Recipe for

the CFPB, 24 Geo. Mason L. Rev.

1213 (2017) ..................................................... 13, 15

viii

TABLE OF AUTHORITIES (con’t)

CFPB, Annual Performance Plan &

Report, & Budget Overview (2023) ..................... 18

Curtis W. Copeland, Cong. Rsch. Serv.,

R41380, The Dodd-Frank Wall

Street Reform and Consumer

Protection Act ..................................................... 6, 9

The Consumer Financial Protection

Bureau’s Semiannual Report to

Congress Before Sen. Comm. on

Banking, Housing, & Urb. Affs.,

118th Cong. (2023) ............................................... 15

Enforcement by the Numbers, CFPB .......................... 7

Kent Barnett, To the Victor Goes the

Toil-Remedies for Regulated Parties

in Separation-of-Powers Litigation,

92 N.C. L. Rev. 481 (2014) ................................... 27

Marija Vader, Ent Wants to Change Its

Credit Union Charter, Colo. Springs

Bus. J. (Oct. 14, 2015) .......................................... 12

Markham S. Chenoweth & Michael P.

DeGrandis, Out of the Separation-ofPowers Frying Pan and Into the

Nondelegation Fire: How the Court's

Decision in Seila Law Makes CFPB's

Unlawful Structure Even Worse, U.

Chi. L. Rev. Online (Aug. 27, 2020) ....................... 8

Max Greenwood, Mulvaney in Senate

Testimony: I’m Required To Be Here,

But Not To Answer Your Questions,

The Hill (Apr. 12, 2018, 11:33 AM) ....................... 9

ix

TABLE OF AUTHORITIES (con’t)

NCUA, 23-FCU-01, Federal Credit

Union Operating Fee Schedule for

2023 (2023) ........................................................... 11

NCUA, 2022–2023 Budget Justification

(2021) .............................................................. 12, 13

NCUA, Community Development Revolving Loan Fund Budget Request

Justification: FY 2023 (2022) .............................. 13

Recent Legislation, 124 Harv. L. Rev.

2123 (2011) ............................................................. 7

Robert L. Nightingale, How to Trim a

Christmas Tree: Beyond Severability

and Inseverability for Omnibus

Statutes, 125 Yale L.J. 1672 (2016) ..................... 18

S. Rep. No. 111-176 (2010) ................................ 6, 9, 13

U.S. Dep’t of the Treasury, Mandatory

Funding Levels for the FY 2023

President’s Budget – Treasury

Chapter (2022) ..................................................... 14

William Baude, Severability First

Principles, 109 Va. L. Rev. 1 (2023) .................... 16

1

INTEREST OF AMICI CURIAE1

Amici Curiae are three trade associations that advocate for and serve credit unions across the United

States: the Credit Union National Association, Inc.

(CUNA), the National Association of Federally-Insured Credit Unions (NAFCU), and the American Association of Credit Union Leagues (AACUL). Amici

regularly file amicus briefs in cases impacting the

credit union movement, including filing a brief in

Seila Law LLC v. CFPB, 140 S. Ct. 2183 (2020), the

last case in which the Court examined the Consumer

Financial Protection Bureau’s (Bureau or CFPB)

unique and unprecedented structural design.

CUNA is the largest trade association in the

United States serving America’s credit unions and the

only national association representing the entire

credit union movement. CUNA represents nearly

5,000 federal and state credit unions, which collectively serve more than 135 million members nationwide. CUNA’s mission, in part, is to advocate for the

responsible regulation of credit unions to ensure market stability, while eliminating needless regulatory

burden that interferes with the efficient and effective

administration of financial services of credit unions to

their millions of members.

NAFCU advocates for all federally insured, notfor-profit credit unions, which serve nearly 137 million members with personal and small business financial service products. It provides members with

1 No party’s counsel authored this brief in whole or in part,

and no person or entity other than Amici, their counsel, or their

members made a monetary contribution intended to fund the

brief’s preparation or submission.

2

representation, information, education, and assistance to meet the constant challenges that cooperative

financial institutions face in today’s hyper-regulated

market. NAFCU proudly represents many smaller

credit unions with limited operations, as well as many

of the largest and most sophisticated credit unions in

the nation. NAFCU represents 77 percent of total federal credit union assets and 62 percent of all federally

insured credit union assets.

AACUL represents every state credit union

league within the United States. AACUL’s mission is

to cultivate the success of individual credit union

leagues, as well as the league system, by supporting

league efforts to advocate, communicate, collaborate,

and influence policy on behalf of credit unions nationwide. AACUL works to ensure that every credit union

in the country has an effective representative league

that can both educate and advocate on their behalf.

Amici represent thousands of highly regulated

credit unions. Credit unions are not-for-profit, member-owned, democratically run institutions in which

members not only receive financial services but play a

significant role in governing the organization. This

unique, consumer-focused relationship is just one of

the many ways in which credit unions differ from

other financial institutions, like banks.

Amici’s members have an acute interest in how

the Court resolves the constitutional question presented in this case. Specifically, whether the Bureau’s

funding scheme in 12 U.S.C. § 5497 violates the Appropriations Clause and separation of powers and, if

so, what this means for the agency’s future. The Bureau has the broadest regulatory reach of any financial agency; it is the first agency to have authority over

3

both bank and nonbank “covered” financial-services

providers; and its enforcement and rulemaking authority extends to financial-service providers both

large and small. This broad grant of authority means

the Bureau also oversees and regulates memberowned financial cooperatives, including Amici’s members. Indeed, credit unions have been subject to dozens of CFPB-rulemakings since the agency’s inception, which have changed the scope of financial markets and have created new industry standards, as well

as safe-harbors. This is cumbersome, duplicative, and

unnecessary for credit unions considering their

unique cooperative, member-owned structure, and existing regulation and supervision by the National

Credit Union Administration (NCUA), an independent financial regulator headed by Board members

with experience with credit unions.

While Amici agree with Respondents that the Bureau’s current funding scheme cannot withstand constitutional scrutiny, this brief focuses on who should

cure the Bureau’s structural shortcomings. That job

belongs to Congress. That said, Amici appreciate that

this political path forward could cause significant disruption. Amici have an interest in ensuring any remedy the Court imposes minimizes the disruption to existing markets, regulatory requirements, and to a

well-functioning credit ecosystem, while still awarding Respondents meaningful relief. Thus, Amici advocate for affirmance and a stay of the judgment to provide the political branches the opportunity to remedy

the Bureau’s funding scheme.

SUMMARY OF THE ARGUMENT

When Congress created the CFPB in 2010, it “deviated from the structure of nearly every other

4

independent administrative agency in our history.”

Seila Law LLC v. CFPB, 140 S. Ct. 2183, 2191 (2020).

From day one, this ingenuity in design invited constitutional scrutiny from all corners: from congressional

leaders, legal scholars, regulated entities, and the

courts alike. Indeed, in Seila Law, this Court held that

a critical part of the Bureau’s unprecedented structure—its single director removable only for cause—violated separation of powers by imposing an unconstitutional limit on the President’s oversight of the Bureau. This case concerns yet another separation-ofpowers problem: Congress’s oversight of the Bureau

through the appropriations process.

I. The constitutional question presented here is

particularly important considering the broad power

the Bureau wields. Whether exercising its rulemaking, supervisory, or enforcement authority, the Bureau regulates an estimated 70,000 U.S. businesses,

which affects 100 percent of individuals who consume

financial products. Not only that, but the Bureau has

more regulatory power and less congressional oversight of its funding than any other financial regulatory agency in the federal government. Its funding

scheme is wholly shielded from Congress’s annual appropriations process and any constraining market

forces. Its director requests an amount within the

specified limits that he or she determines is reasonably necessary, and the Federal Reserve Board fulfills

the request from the Federal Reserve System. And

any unused funds rollover until they are expended.

This unique and unprecedented confluence of the

sword and the purse poses an obvious separation-ofpowers problem under the Appropriations Clause.

5

II. Unlike in Seila Law, however, the Court cannot disregard the constitutional defects though a severance analysis. The constitutional problems the Fifth

Circuit identified with the Bureau’s funding scheme

are inextricably interwoven with the exercise of the

agency’s administrative power. And to make the

agency financially viable requires a congressional rewrite far beyond the judiciary’s limited review power.

That said, the Court does have the equitable power to

minimize any disruption from its constitutional holding by briefly staying the judgment. A stay would allow the political branches time to pass an appropriations measure to fund the Bureau, while minimizing

the disruption to consumers and the market. During

the stay, prudence requires the Bureau to pause rulemaking activity to give Congress the time and space

to negotiate and pass a new funding measure.

ARGUMENT

I.

The Bureau’s Scope of Power and Structure

Are Unique in Many Ways—Including Its Unprecedented Funding Scheme.

The Bureau is a financial agency like no other. It

wields vast power over a significant portion of the U.S.

economy, yet its funding scheme is uniquely insulated

from Congress. While other financial agencies generate their own funds or go through Congress’s annual

appropriations process, the Bureau requests an

amount (up to a statutory cap) that its director determines is reasonably necessary, and the Federal Reserve Board must fulfill the request. Because of the

Bureau’s unprecedented combination of power and insulation, its funding scheme is particularly vulnerable

to separation-of-powers abuse and worthy of scrutiny.

6

A. Congress created a uniquely powerful

and autonomous independent agency.

How the Bureau came to be is well-documented.

See Br. of Amicus Curiae Credit Union Nat’l Assoc.,

Inc. in Support of Pet’r and a Stay, at 8–20, Seila Law

LLC v. CFPB, 140 S. Ct. 2183 (2020) (No. 19-7). In

2007, “the subprime mortgage market collapsed, precipitating a financial crisis that wiped out over $10

trillion in American household wealth and cost millions of Americans their jobs, their retirements, and

their homes.” Seila Law LLC v. CFPB, 140 S. Ct. 2183,

2192 (2020). In response, Congress adopted sweeping

legislation establishing “an independent regulatory

agency tasked with ensuring that consumer debt

products are safe and transparent.” Id. at 2191.

To achieve this end, the Bureau was given a level

of “power and autonomy” with “no current equivalent

anywhere else in the Federal government.” S. Rep. No.

111-176, at 246 (2010) (minority views). To begin, the

Bureau has strikingly “broad rulemaking powers.”

Curtis W. Copeland, Cong. Rsch. Serv., R41380, The

Dodd-Frank Wall Street Reform and Consumer Protection Act: Regulations to be Issued by the Consumer

Financial Protection Bureau 5 (2010) (CRS Report). It

is tasked with “implement[ing]” and “enforc[ing]” 18

financial consumer-protection laws that predate the

agency, 12 U.S.C. § 5511(a), and a broad prohibition

on “any unfair, deceptive, or abusive act or practice”

by covered institutions in the consumer-finance sector, § 5536(a)(1)(B).

The Bureau also has “potent enforcement powers.” Seila Law, 140 S. Ct. at 2193. It can pursue investigations, issue subpoenas and civil investigative

demands, initiate administrative adjudications, and

7

prosecute civil actions in court. 12 U.S.C. §§ 5562,

5564(a), (f). The agency can—and frequently does—

pursue civil penalties. § 5565(a), (c). Since its inception, the Bureau has collected more than $16 billion in

civil penalties. Enforcement by the Numbers, CFPB,

bit.ly/3NPgYjC (last visited July 9, 2023).

The Bureau also has “extensive adjudicatory authority.” Seila Law, 140 S. Ct. at 2193. It “may conduct

administrative proceedings to ‘ensure or enforce compliance with’ the statutes and regulations it administers.” Id. (quoting 12 U.S.C. § 5563(a)). In these proceedings, it can award “any appropriate legal or equitable relief.” 12 U.S.C. § 5565(a)(1). Its presiding officers have authority to issue subpoenas and order depositions. 12 C.F.R. § 1081.104(a)–(b) (2023).

These vast rulemaking, enforcement, and adjudicatory powers were paired with a “unique institutional design” featuring an unprecedented level of insulation from the elected branches. Recent Legislation, 124 Harv. L. Rev. 2123, 2129–30 (2011) (predicting the agency’s structure “may trouble even proponents of the Bureau”); see also Seila Law, 140 S. Ct. at

2191 (“In organizing the CFPB, Congress deviated

from the structure of nearly every other independent

administrative agency in our history.”).

For one, the Bureau was (unconstitutionally) insulated from direct accountability to the executive

branch. The agency is headed by a single director, appointed to a five-year term by the President with the

advice and consent of the Senate, and—initially—removable by the President only for “inefficiency, neglect of duty, or malfeasance in office.” 12 U.S.C.

§ 5491(b)(2), (c)(1), (c)(3). This latter provision was the

subject of review in Seila Law. The Court held “that

8

the CFPB’s leadership by a single individual removable only for inefficiency, neglect, or malfeasance violates the [Constitution’s] separation of powers.” Seila

Law, 140 S. Ct. at 2197. The Court severed the director’s insulation from removal, leaving the director “removable at will by the President.” Id. at 2210–11.

Though Seila Law settled the issue of executive

insulation, other potential constitutional defects—like

whether the Bureau’s funding scheme violates the Appropriations Clause—remained. See Markham S.

Chenoweth & Michael P. DeGrandis, Out of the Separation-of-Powers Frying Pan and Into the Nondelegation Fire: How the Court’s Decision in Seila Law Makes

CFPB’s Unlawful Structure Even Worse, U. Chi. L.

Rev. Online (Aug. 27, 2020), bit.ly/3PpE3ef.

Through its unique funding scheme in 12 U.S.C.

§ 5497, the Bureau is exempt from the annual appropriations process applicable to nearly every other federal agency. Rather, the agency “receives funding directly from the Federal Reserve [System], which is itself funded outside the appropriations process”

through interest generated by open-market investments and assessments on member banks. Seila Law,

140 S. Ct. at 2193–94. The Bureau’s director “requests

an amount that the [d]irector deems ‘reasonably necessary to carry out’” the Bureau’s vast duties, and the

Federal Reserve Board must honor that request, so

long as the request does not exceed the specified limit

of total operating expenses of the Federal Reserve System. Id. at 2194 (quoting 12 U.S.C. § 5497(a)). Nor

must the Bureau relinquish funds in excess of its actual operating costs; it rolls over unused funds yearover-year “until expended.” 12 U.S.C. § 5497(c)(1).

9

For these reasons, the Bureau is not appropriated

funds by Congress. Nor does it defray its operating expenses by raising funds through its own investments

or issuing assessments. Instead, the Federal Reserve

Board—a unique public-private partnership corporation partially owned by private member banks and

having limited rulemaking ability—generates funds

and turns them over to the Bureau in an account

maintained outside the Treasury. And all this is done

upon the director’s unchecked2 determination of an

amount reasonably necessary to fund the Bureau’s

powerful operations. See id.

At the Bureau’s inception, it was questionable

whether this funding scheme was too insulated from

congressional review. S. Rep. No. 111-176, at 247 (minority view) (arguing the agency has “an enormous …

funding source without … congressional oversight of

its budget”); CRS Report, at 17 (“Because the CFPB

might not receive appropriated funds, Congress may

not be able to control the Bureau’s rulemaking

through appropriations restrictions.”). After Seila

Law, the Bureau’s “newfound presidential subservience exacerbates the constitutional problems arising

from … budgetary independence because it more

2 The Bureau’s funds are expressly shielded from “review by

the Committees on Appropriations of the House of Representatives and the Senate.” 12 U.S.C. § 5497(a)(2)(C). To be sure, the

director must offer some justification of the Bureau’s budget in a

semi-annual report to congressional committees and “appear” in

front of those committees. § 5496(a)–(b), (c)(2). But the actual efficacy of this “oversight” is questionable. See Max Greenwood,

Mulvaney in Senate Testimony: I’m Required To Be Here, But Not

To Answer Your Questions, The Hill (Apr. 12, 2018, 11:33 AM),

bit.ly/43TnN9u (noting the acting director testified that “it would

be [his] statutory right to just sit here and twiddle [his] thumbs

while you all ask questions”).

10

completely unites the powers of the purse and sword

in the President’s hands.” CFPB v. All Am. Check

Cashing, Inc., 33 F.4th 218, 234 (5th Cir. 2022) (en

banc) (Jones, J., concurring). This is precisely what

the Appropriations Clause forbids. Alexander Hamilton, Speech on the Compromises of the Constitution to

the New York Convention (June 24, 1788), in 2 The

Works of Alexander Hamilton 455 (John C. Hamilton

ed., 1850) (“[Y]ou shall not place these powers either

in the Legislative or Executive, singly; neither one nor

the other shall have both; because this would destroy

that division of powers on which political liberty is

founded, and would furnish one body with all the

means of tyranny.”).

B. The Bureau’s funding scheme is distinct

from other financial agencies.

“‘Perhaps the most telling indication of [a] severe

constitutional problem’ with an executive entity ‘is [a]

lack of historical precedent’ to support it.” Seila Law,

140 S. Ct. at 2201 (quoting Free Enter. Fund v. Pub.

Co. Acct. Oversight Bd., 561 U.S. 477, 505 (2010)) (alterations in original). To avoid this administrative

dark place, the Bureau casts its statutory funding

scheme as “accord[ing] with Congress’s longstanding

practice of authorizing agencies to spend money indefinitely from sources other than annual appropriations

statutes.” (Pet’rs’ Br. 12.) Indeed, the agency contends

that Congress “frequently” approves of these non-congressional funding sources—i.e., funds from investments, fees, and assessments—“for financial regulatory agencies,” including the NCUA, Office of the

Comptroller of the Currency (OCC), Federal Reserve

Board, and Federal Deposit Insurance Corporation

(FDIC). (Id. at 21–23.)

11

But the Bureau’s funding scheme is materially

different than each of these financial regulators. Generally, these other regulators collect fees or assessments in exchange for services they provide, like insuring customer deposits. Many banks and credit unions that pay the fees choose the regulator to which

they pay assessments by how they organize or charter.

Plus, none of the other regulators are funded through

investments, fees, or assessments of another agency or

corporation. Put differently, the other regulators generate their own funds through the services they provide, and they are authorized to use those funds to defray their operating expenses.

Consider the NCUA, the financial regulator that

has regulated Amici’s members for more than five decades. The NCUA is largely funded by “an annual operating fee” paid by each federal credit union. See 12

U.S.C. § 1755(a). But the similarities with the Bureau’s funding scheme end there.

Unlike the Bureau, the NCUA determines the

amount of annual operating fees and collects the fees

itself. See, e.g., NCUA, 23-FCU-01, Federal Credit Union Operating Fee Schedule for 2023, at 1 (2023),

bit.ly/3JlONqc. From the time the fees are paid, the

NCUA retains control over them. 12 U.S.C. § 1755(d)–

(e) (requiring the fees to “be deposited with the Treasurer of the United States,” but giving the NCUA authority to direct the Secretary of the Treasury to “invest and reinvest” the fees and allowing the NCUA to

“expend[]” the fees “to defray the expenses incurred in

carrying out” the NCUA’s operations). Plus, the operating fees the NCUA collects correlate to the cost of

the services the NCUA provides in regulating and

chartering federal credit unions. § 1755(a) (stating the

12

fee “may be composed of one or more charges identified as to the function or functions for which assessed”); § 1755(b) (stating the fee should give “due

consideration to the expenses of the [NCUA] in carrying out its responsibilities”); NCUA, 2022–2023

Budget Justification, at 52–53 (2021), bit.ly/3NsBQfj

(explaining how the NCUA separates the cost of its

regulator operations (which only apply to federally

chartered credit unions) and the cost of its insurance

operations (which apply to federally insured credit unions, regardless of charter)).

Under the dual federal and state chartering system, credit unions choose between federal and state

charters. The NCUA receives fees only from the entities it regulates: “each Federal credit union.” 12

U.S.C. § 1755(a). Put differently, the credit unions

paying the NCUA’s annual operating fees are opting

in to the NCUA’s system. If the NCUA’s regulations

are, in a particular credit union’s view, less preferable

than a particular state’s regulations or no longer align

with the institution’s mission, the credit union can

switch to a state charter (provided it meets the state’s

chartering requirements). See, e.g., Marija Vader, Ent

Wants to Change Its Credit Union Charter, Colo.

Springs Bus. J. (Oct. 14, 2015), bit.ly/3O18ohV. So,

“[f]ar from being able to choose [its] own funding levels, [the NCUA’s] fee revenue [is] inherently constrained by market forces.” (Resp’ts’ Br. 35.); see also

§ 1755(b) (stating the amount of the operating fee

should give “due consideration to … the ability of Federal credit unions to pay the fee”).

The NCUA also has meaningful oversight, both

from its structure and its commitment to public transparency. Rather than a sole director like the Bureau,

13

the NCUA has a three-member bipartisan board. 12

U.S.C. § 1752a(b)(1). Further, the NCUA’s regulatory

authority pales in comparison to the Bureau’s ability

to “regulate every aspect of financial transactions,” S.

Rep. No. 111-176, at 247 (minority views); see also C.

Boyden Gray, Extra Icing on an Unconstitutional

Cake Already Frosted? A Constitutional Recipe for the

CFPB, 24 Geo. Mason L. Rev. 1213, 1228 (2017) (stating the NCUA’s and other “narrowly-focused entities[’]” missions are “hardly the stuff from which tyranny is made,” in contrast to the vast powers of the

CFPB). Even further, unlike the Bureau, the NCUA

“publishes a detailed draft budget in the Federal Register and solicits public comments on it at a meeting

with its Board and other agency leadership.” NCUA,

2022–2023 Budget Justification, at 19.

Accordingly, the NCUA’s funding scheme is analogous to a commercial relationship: the NCUA regulates and charters federal credit unions and, in exchange, receives an annual fee. The NCUA is funded

by what it earns through its services.3 Of course,

Amici’s members may take issue with the NCUA’s annual fee, but the point remains: unlike the Bureau’s

funding scheme, a nexus exists between the NCUA’s

operations and the source of its funds. It does not repurpose funding generated by another agency or

3 As needed, the NCUA supplements its funding through the

annual appropriations process. For example, the NCUA requested $4,000,000 in funding for the Community Development

Revolving Loan Fund. See NCUA, Community Development Revolving Loan Fund Budget Request Justification: FY 2023, at 1

(2022), bit.ly/3NnRRTR. The NCUA received less than the requested amount ($3,500,000) in the annual appropriations process. See Consolidated Appropriations Act, 2023, Pub. L. 117328, 136 Stat. 4690.

14

corporation’s unrelated investments and assessments.

Nor does it have the power of the Bureau, which as

discussed “wields vast rulemaking, enforcement, and

adjudicatory authority over a significant portion of the

U.S. economy.” Seila Law, 140 S. Ct. at 2191. And if

the NCUA’s fees or regulations are less preferential

than a state’s, a federal credit union may decide to

change its charter, if it meets the state’s requirements. But the Bureau’s regulated entities have no alternative; they are captive to the Bureau.

The funding schemes for the other financial agencies referenced by the Bureau are similarly distinguishable from the agency’s funding scheme. The OCC

charges fees to the banks it regulates and examines.4

12 U.S.C. §§ 16, 482–483. The Federal Reserve Board

imposes assessments on its member banks and

“earn[s] revenues through open-market operations,

such as purchases and sales of bonds and securities.”

(See Pet’rs’ Br. 23 (citing 12 U.S.C. §§ 243–244).) And

the FDIC “assesse[s]” the costs of its examinations of

affiliates, 12 U.S.C. § 1820(e), and charges its insureds

fees “to establish and maintain the reserve ratio of the

Deposit Insurance Fund,” 12 U.S.C. § 1815(d)(1). Each

bank subject to these regulators has voluntarily opted

in to these federal options.

At bottom, no other financial regulatory agency

shares the Bureau’s unique funding scheme—which

4 As a practical matter, the OCC is funded by the appropri-

ations process, and the funds collected by the OCC subsequently

offset the appropriation. Under the Treasury’s budget, the fees

that the OCC collects are considered “offsetting collections” from

the funds that Congress appropriates to the Department of the

Treasury (in which the OCC is housed). U.S. Dep’t of the Treasury, Mandatory Funding Levels for the FY 2023 President’s

Budget – Treasury Chapter, at 3 (2022), bit.ly/3JsePrP.

15

was by design. See The Consumer Financial Protection

Bureau’s Semiannual Report to Congress Before Sen.

Comm. on Banking, Housing, & Urb. Affs., 118th

Cong. (2023) (statement of Sen. Sherrod Brown),

available at bit.ly/3NOrgAP. Nor does any other financial regulator have the same level of power and

autonomy that the Bureau does—again, by design.

See Gray, supra, at 1224 (“This authority is truly unprecedented in the history of the United States Constitution. Never before has an executive agency with

such broad powers been vested with its own independent budgetary authority.”). The Bureau’s power and

budgetary independence make its funding particularly vulnerable to separation-of-powers abuse and

worthy of the Court’s scrutiny.

The remainder of Amici’s arguments address the

remedy. Amici represent thousands of regulated

credit unions, which have spent substantial time and

resources investing in protocols and systems to comply with the Bureau’s rules and regulations, some of

which have significantly changed the scope of the financial marketplace. Amici have an interest in correcting the agency’s structural defects while ensuring

any remedy minimizes disruption to markets, including with respect to imminent or proposed rules.

II. The Court Should Affirm but Stay Its Judgment So the Political Branches Can Adopt a

New Funding Scheme for the Bureau.

The constitutional defects the Fifth Circuit identified with the Bureau’s funding scheme are deep and

inextricably interwoven with the exercise of the

agency’s vast administrative power. Because of this,

and unlike in Seila Law, severance is not the answer.

To make the Bureau financially viable again would

16

require the Court to overhaul and rewrite the Bureau’s funding measure, which it cannot do. The

Court, however, is not without options to minimize

disruption from its holding. It has long possessed the

equitable power to stay its judgment to give way to the

political process. It should use this power here. Further, because any new rulemaking would be subject to

constitutional challenge, as a prudential matter, the

agency should pause all rulemaking during the stay.

A. Severance cannot save the Bureau.

At its core, the severability doctrine is a way for

the Court to carry out its constitutional command “to

say what the law is.” Marbury v. Madison, 5 U.S. (1

Cranch) 137, 177 (1803); see also William Baude, Severability First Principles, 109 Va. L. Rev. 1, 5–6, 9–11

(2023). When faced with “a constitutional flaw in a

statute,” the Court “‘limit[s] the solution to the problem,’ severing any ‘problematic portions while leaving

the remainder intact.’” Free Enter. Fund v. Pub. Co.

Acct. Oversight Bd., 561 U.S. 477, 508 (2010) (quoting

Ayotte v. Planned Parenthood of N. New Eng., 546 U.S.

320, 328–329 (2006)). That is, the Court answers,

“What is the combined legal effect of the Constitution

and one or more statutory provisions when there is a

conflict between them?” Baude, supra, at 5.

The standard for determining the severability of

an unconstitutional provision is settled: “Unless it is

evident that the Legislature would not have enacted

those provisions which are within its power, independently of that which is not, the invalid part may be

dropped if what is left is fully operative as a law.”

Champlin Ref. Co. v. Corp. Comm’n of State of Okla.,

286 U.S. 210, 234 (1932); see also Alaska Airlines, Inc.

v. Brock, 480 U.S. 678, 684 (1987).

17

Perhaps obvious—but worth restating—the statute post-severance must be “operative as a law.”

Champlin, 286 U.S. at 234. A severed statute, while

“inherently unobjectionable,” cannot survive “unless

it appears … that, standing alone, legal effect can be

given to it.” Dorchy v. Kansas, 264 U.S. 286, 290

(1924); Alaska Airlines, 480 U.S. at 684 (“Congress

could not have intended a constitutionally flawed provision to be severed from the remainder of the statute

if the balance of the legislation is incapable of functioning independently.” (emphasis added)).

This was the problem in Hill v. Wallace, 259 U.S.

44 (1922). After the Court held a tax on grain futures

exceeded Congress’s taxing power, it took up the issue

of severance. Id. at 66–67. Over an express severance

clause, the Court declined to “amend the act” by “inserting limitations it d[id] not contain.” Id. at 70–71.

It’s not the role of the Court to “introduce words of limitation into a … statute”; to do so “would be to make a

new law, not enforce an old one.” Id. at 71 (quoting In

re Trade-Mark Cases, 100 U.S. 82, 99 (1879)); see also

United States v. Reese, 92 U.S. 214, 221 (1875). Further, because the unconstitutional tax was “so interwoven” with other parts of the act and implementing

regulations, the Court invalidated all those parts that

could not be separated. Hill, 259 U.S. at 70. Indeed,

based on the act’s structure and general aim, the Secretary of Agriculture’s rulemaking power made no

sense in the absence of the unconstitutional tax.

The “fully operative as a law” prong of the severability test recognizes a straightforward proposition: if

a statutory provision is unconstitutional and what remains is a law that is unworkable without rewriting

it, courts must invalidate the entire statute. To amend

18

the statute by judicial rewrite would be to step into

the legislative role of Congress, id. at 71, while bypassing the Constitution’s presentment procedures,

Robert L. Nightingale, How to Trim a Christmas Tree:

Beyond Severability and Inseverability for Omnibus

Statutes, 125 Yale L.J. 1672, 1712 (2016).

Therein lies the Bureau’s severance problem. (See

Pet’rs’ Br. 39–42.) Simply, the agency would be unable

to wield its unprecedentedly broad supervisory, rulemaking, enforcement, and adjudicatory authority

without the constitutionally problematic portions of

its funding scheme. That is, the agency is completely

unworkable as a financial regulatory agency without

the funding provisions outlined in 12 U.S.C. § 5497.

Cf. CFPB v. All Am. Check Cashing, Inc., 33 F.4th 218,

242 (5th Cir. 2022) (en banc) (Jones, J., concurring)

(“Just as a government actor cannot exercise power

that the actor does not lawfully possess, so, too, a government actor cannot exercise even its lawful authority using money the actor cannot lawfully spend.”).

For perspective, in recent years the Bureau’s annual budget “has exceeded half a billion dollars.” Seila

Law LLC v. CFPB, 140 S. Ct. 2183, 2194 (2020).5 The

agency uses its massive war chest to



implement rulemakings, which are often hundreds of pages long, that enforce consumercredit laws, see 12 U.S.C. § 5581(b)—such as

the Truth in Lending Act, Equal Credit Opportunity Act, the Home Mortgage Disclosure Act,

and the Fair Credit Reporting Act, among

The budget exceeds $650 million for Fiscal Year 2023.

CFPB, Annual Performance Plan & Report, & Budget Overview

15 (2023), bit.ly/3XurWP4.

5

19

others—and the broad authority vested concerning unfair, deceptive, or abusive finance

practices, see 12 U.S.C. § 5531;



supervise and examine “covered persons” (including credit unions with more than $10 billion in assets) similar to prudential banking

regulators, see §§ 5514(b), 5515(b);



investigate with administrative subpoenas

and enter into consent agreements that apply

a panoply of equitable and legal relief,

§§ 5562(b), 5564(a)–(b);



enforce laws subject to its jurisdiction independent of the Department of Justice by filing

federal court lawsuits, § 5564(a), (d);



administratively adjudicate matters brought

by its enforcement division within its jurisdiction, § 5563(a); and



issue consent and cease-and-desist orders to

assess millions in civil penalties or to take

away a person’s livelihood, see §§ 5565, 5566.

But without the hundreds of millions of dollars in annual funding, and Congress’s permission to spend this

money, the agency is operationally functionless.

The Bureau invites the Court to avoid this outcome by “surgically” reforming § 5497 into a constitutionally sound funding scheme. The Court should decline. “The Court’s only instrument” to remedy a constitutional defect in a statute “is a blunt one.” Seila

Law, 140 S. Ct. at 2211. Courts have “the negative

power to disregard an unconstitutional enactment.”

Id. (quoting Massachusetts v. Mellon, 262 U.S. 447,

488 (1923) and citing Marbury, 5 U.S. (1 Cranch) at

20

178.) This negative power allows courts to “strike out

words” but not “insert words that are not now in the

statute.” Marchetti v. United States, 390 U.S. 39, 60

n.18 (1968) (citations omitted). As the Court said in

Seila Law, the Court cannot “re-write Congress’s work

by creating offices, terms, and the like.” 140 S. Ct. at

2211 (emphasis added). The same goes for creating a

new funding scheme. This “editorial freedom ... belongs to the Legislature, not the Judiciary.” Id. (quoting Free Enterprise Fund, 561 U.S., at 510).

As the Fifth Circuit recognized, the Bureau’s

funding scheme is without equal. Cmty. Fin. Servs.

Ass’n of Am., Ltd. v. CFPB, 51 F.4th 616, 638–40 (5th

Cir. 2022). The agency enjoys self-actualizing, perpetual funding from a double-insulated source—all of

which is exempt from congressional appropriations

committee review. See 12 U.S.C. § 5497(a). The agency

maintains its funds in an account outside the Treasury controlled solely by the director of the CFPB.

§ 5497(b)(1), (c)(1). And the agency may rollover unused funds year-over-year “until expended.” Id.

§ 5497(c)(1). Meaning the funds drawn from the

Treasury by the director under § 5497(a)(1) “are permanently available to him without any further act of

Congress.” Cmty. Fin. Servs. Ass’n, 51 F.4th at 639.

Because of the Bureau’s deeply integrated funding scheme, there is no way for the Court to correct

the constitutional problems by surgically disregarding

the unconstitutional portions of the statute. Rather,

for the scheme to pass constitutional muster and operate fully post-severance, the Court would have to

construct an entirely new appropriations statute.

That rewrite would have to accomplish at least five

drafting aims. First, create a new funding provision to

21

correct § 5497(a)(1)’s double-insulated, perpetual

funding feature. Second, disregard § 5497(a)(2)(C),

and create a process for review by the congressional

appropriations

committees.

Third,

disregard

§ 5497(b)(1)’s “separate fund” requirement and direct

the CFPB and Treasury to house the Bureau Fund in

the Treasury. Fourth, disregard the director’s unchecked power over the purse in § 5497(c)(1), and create a mechanism for appropriate congressional oversight. And fifth, revise § 5497(c)(1)’s rollover allowance to track § 289(a)(3)(B)’s requirement that unused

funds shall be returned to the Treasury.

This statutory overhaul proves too much for the

Court’s “blunt,” “negative power to disregard an unconstitutional enactment.” Seila Law, 140 S. Ct. at

2211. Time and again, the Court has declined to assume Congress’s “editorial freedom” through additive

severance. It should do so again.

B. The Court should stay its judgment for

three to six months to minimize the disruption from its constitutional holding.

Because the Court is unable to remove the constitutional defects in the Bureau’s funding scheme while

maintaining a fully operative law, the result is an operationally defunct agency. The Court must recognize

this inconvenient reality: without a constitutional

funding scheme, which only Congress can provide, the

Bureau cannot perform its mission.

As entities regulated by the Bureau, Amici’s members appreciate the disruption such a ruling would

generate. See Seila Law, 140 S. Ct. at 2210 (crediting

arguments that eliminating the CFPB would “trigger

a major regulatory disruption” in the consumer-

22

finance space). The Bureau has existed for more than

a decade. During this time, it has succeeded in constructing a sprawling regulatory framework, one

which has never adequately accounted for credit unions’ unique size, structure, and framework as consumer-owned cooperatives. Nonetheless, credit unions have spent significant time and resources complying with the Bureau’s rules and regulations, and

an unwinding of these new requirements and associated safe harbors without an orderly process would be

operationally chaotic. While this is no reason to sanction a funding scheme that violates separation of powers, or force a severance conclusion that invades legislative prerogative, it does require a measured and equitable approach to craft the appropriate remedy.

To be clear, convenience has never been enough to

save an unconstitutional law. INS v. Chadha, 462

U.S. 919, 944 (1983). Nor should convenience cause

the Court to refashion the Bureau’s funding scheme to

avoid the uncertain, and at times messy, political process. Cf. Commodity Futures Trading Comm’n v.

Schor, 478 U.S. 833, 864 (1986) (Brennan, J., dissenting) (noting while resolution of claim “may be accomplished more conveniently … the Framers foreswore

this sort of convenience” when it impinges on “freedom” secured by the Constitution). Indeed, the Court

has not shied away from remedying separation-ofpowers violations even when the path forward was

hard or messy. The Court in Northern Pipeline Construction Co. v. Marathon Pipe Line Co. struck the

bankruptcy court’s entire jurisdictional design because Congress encroached upon Article III by vesting

judicial power in “a non-Art. III adjunct.” 458 U.S. 50,

87 (1982) (plurality). Although the Court stayed its

judgment, it showed no hesitation to invalidate

23

Congress’s chosen structure for bankruptcy courts nationwide, with the implicit instruction to try again. Id.

at 88 (giving “Congress an opportunity to reconstitute

the bankruptcy courts or to adopt other valid means

of adjudication, without impairing the interim administration of the bankruptcy laws”); id. at 92

(Rehnquist, J., concurring in judgment).

The Court has issued other disruptive decisions

when fidelity to the Constitution demanded it. In

Chadha, the Court invalidated hundreds of statutes

because of a separation-of-powers violation, 462 U.S.

at 958–59. In Youngstown Sheet & Tube Co. v. Sawyer,

it refused to acquiesce to an unconstitutional seizure

of the nation’s steel mills during wartime. 343 U.S.

579, 589 (1952). And, in New Process Steel, L.P. v.

NLRB, it invalidated hundreds of adjudications for

failure to follow the quorum requirement in the National Labor Relations Act. 560 U.S. 674, 688 (2010).

In the end, “[t]here is no support in the Constitution

or decisions of this Court for the proposition that the

cumbersomeness and delays often encountered in

complying with explicit Constitutional standards may

be avoided,” Chadha, 462 U.S. at 959, even when remedying a constitutional violation.

Assuming the Bureau’s funding scheme violates

separation of powers, the correct outcome is to recognize the agency is unable to act without a constitutional funding scheme. For Respondents specifically,

the appropriate remedy is for the Court to affirm the

Fifth Circuit’s decision to vacate the Payday Lending

Rule. See Cmty. Fin. Servs. Ass’n, 51 F.4th at 643. As

the Fifth Circuit correctly held, “Because the funding

employed by the Bureau to promulgate the Payday

Lending Rule was wholly drawn through the agency’s

24

unconstitutional funding scheme, there is a linear

nexus between the infirm provision (the Bureau’s

funding mechanism) and the challenged action (promulgation of the rule).” Id. (footnote omitted). Thus, the

rule must be vacated as “the product of the Bureau’s

unconstitutional funding scheme.” Id.; see also Collins

v. Yellen, 141 S. Ct. 1761, 1788–89 (2021).6

While the constitutional violation here mandates

admittedly broad relief, the Court remains empowered to minimize the disruption from its ruling. Federal courts have broad equitable discretion to determine the appropriate remedy for constitutional violations. Winter v. Nat. Res. Def. Council, Inc., 555 U.S.

7, 32 (2008); Milliken v. Bradley, 433 U.S. 267, 286

(1977). In deciding “what is necessary, what is fair,

and what is workable,” North Carolina v. Covington,

137 S. Ct. 1624, 1625 (2017) (per curiam) (quoting

New York v. Cathedral Acad., 434 U.S. 125, 129

(1977)), the Court weighs “the balance of equities” and

“the public interest,” Winter, 555 U.S. at 32. Among

the remedial measures available is for the Court to

6 The Court occasionally limits its constitutional holdings to

prospective application, most notably in Buckley v. Valeo, 424

U.S. 1, 142 (1976) (per curiam) and Northern Pipeline, 458 U.S.

at 88. Nonetheless, in each case the Court still awarded meaningful relief to the petitioners. N. Pipeline, 458 U.S. at 88 (awarding petitioner relief it requested including affirming lower court’s

dismissal order); Buckley, 424 U.S. at 142–43 (awarding prospective declaratory and injunctive relief because that is what plaintiff asked for). In Collins, the Court further clarified that,

“[a]lthough an unconstitutional provision is never really part of

the body of governing law … it is still possible for an unconstitutional provision to inflict compensable harm.” 141 S. Ct. at 1788–

89. This is precisely what the Fifth Circuit found in establishing

a nexus between the challenged rulemaking and the agency’s

funding scheme. Cmty. Fin. Servs. Ass’n, 51 F.4th at 643.

25

stay its judgment for a brief period. A stay would allow

the Bureau to continue to exist in name under the

cloud of the Court’s constitutionality holding, while

also allowing the political branches time to respond to

(and potentially remedy) the structural problem with

the agency’s funding.

The Court has previously used stays to minimize

the disruption of rulings with otherwise sweeping effects. See N. Pipeline, 458 U.S. at 88 (ordering fourmonth stay7 to “afford[] Congress an opportunity to reconstitute the bankruptcy courts … without impairing

the interim administration of the bankruptcy laws”);

Buckley, 424 U.S. at 143 (ordering 30-day stay to “allow[] the present Commission in the interim to function de facto in accordance with the substantive provisions of the Act”); Bowsher v. Synar, 478 U.S. 714, 736

(1986) (ordering 60-day stay “to permit Congress to

implement … fallback provisions”). As noted, the

economy, financial markets, and financial institutions, including Amici’s members, rely on regulatory

stability to operate and transact business. Whether

the Bureau is exercising its supervisory, rulemaking

or enforcement authority, the agency regulates an estimated 70,000 financial institutions—and 100 percent of individuals who consume financial products.

While the Bureau’s entrenchment in everyday financial life cannot save its unconstitutional structure,

nor should it influence the Court’s severance analysis,

eliminating the agency from the regulatory ecosystem

overnight would be dangerous and create uncertainty.

7 The Court later extended the stay to six months. N. Pipe-

line Constr. Co. v. Marathon Pipe Line Co., 459 U.S. 813 (1982).

26

For this reason, the least disruptive remedy is for

the Court to stay its judgment in the case for three to

six months and leave the appropriations process to

Congress. See N. Pipeline, 458 U.S. at 88. A constitutionally reconstituted agency would have the authority to ratify prior final agency actions (or not) before

the mandate issues; reconsider pending enforcement

actions, see Doolin Sec. Sav. Bank, F.S.B. v. OTS, 139

F.3d 203, 212–13 (D.C. Cir. 1998); FEC v. Legi-Tech,

Inc., 75 F.3d 704, 709 (D.C. Cir. 1996);8 and start readjudicating qualifying prior adjudications, if any,

Canning v. NLRB, 823 F.3d 76, 80 (D.C. Cir. 2016);

Intercollegiate Broad. Sys., Inc. v. Copyright Royalty

Bd., 796 F.3d 111, 118–19 (D.C. Cir. 2015).

During the stay period, the Bureau should also

pause any new or ongoing rulemaking activity. For

one, the average time between publication of a proposed rule and the final rule is more than a year.

Thus, it would be illogical to initiate new rulemakings

during the three- to six-month stay period. Further,

for ongoing rulemakings, these rules may be the subject of congressional compromise related to appropriations, and it would be more efficient to pause ongoing

rulemaking (and the associated spending) to give the

political branches the space needed to craft a solution

for the constitutional problem.

Even if passing a new appropriations measure

proves too much for the political branches, a reasonable stay would give the Bureau time to transition its

8 The reconstituted Bureau need not reaffirm enforcement

actions that have been closed because of consent decrees and

judgments. See Reynoldsville Casket Co. v. Hyde, 514 U.S. 749,

758 (1995) (“New legal principles, even when applied retroactively, do not apply to cases already closed.”).

27

affairs with minimal disruption to the markets, consumers, and regulated entities. Even more, ordering a

stay as a remedial measure is consistent with core tenets of the law of remedies. It shifts responsibility to

Congress to fix or otherwise address the unconstitutional funding scheme it devised. See Kent Barnett, To

the Victor Goes the Toil—Remedies for Regulated Parties in Separation-of-Powers Litigation, 92 N.C. L.

Rev. 481, 485 (2014) (criticizing remedy fashioned by

the Court in Free Enterprise Fund because it required

“Congress [to] pa[y] no serious price for establishing

an unconstitutional agency”).

CONCLUSION

The Court should affirm the Fifth Circuit’s decision vacating the Bureau’s Payday Lending Rule because the agency’s funding scheme violates the Appropriations Clause. In doing so, the Court should

acknowledge what affirmance means for the Bureau:

that the agency is operationally defunct absent a congressional fix. To minimize disruption on markets and

financial transactions, and to allow the political

branches time to react to its decision and to adopt a

funding measure to fund the Bureau, the Court should

stay its judgment for three to six months.

28

Respectfully submitted,

LEAH C. DEMPSEY

BROWNSTEIN HYATT

FARBER SCHRECK, LLP

1155 F Street N.W.

Washington, DC 20004

(202) 296-7353

JULIAN R. ELLIS, JR.

Counsel of Record

ROBERT P. BACAJ

BROWNSTEIN HYATT

FARBER SCHRECK, LLP

410 17th Street, Suite 2200

Denver, CO 80202

ALEXANDER MONTERRUBIO (303) 223-1100

jellis@bhfs.com

CREDIT UNION NATIONAL

ASSOCIATION

99 M Street SE, Suite 300

Washington, DC 20003

(202) 525-8558

ANN PETROS

NATIONAL ASSOCIATION OF

FEDERALLY-INSURED

CREDIT UNIONS

3138 10th Street

North Arlington, VA 22201

(703) 842-2212

Attorneys for Amici Curiae

JULY 10, 2023