Funding for Consumer Financial Protection Bureau has Consequences for Housing
In a case that could have significant repercussions for the housing industry, the U.S. Supreme Court on Oct. 3 heard oral arguments in Consumer Financial Protection Bureau (CFPB) v. Community Financial Services Association of America.
The case centers on whether the way the CFPB receives its funding is a violation of the Appropriations Clause of the U.S. Constitution. Congress allows the CFPB to be funded through the Federal Reserve, rather than the annual appropriations process that determines the federal budget.
NAHB joined the Mortgage Bankers Association and the National Association of Realtors to file an amicus brief warning the Supreme Court that the “housing market could descend into chaos” if the high court unwittingly rejected numerous mortgage rules that NAHB’s members rely on to ensure people can purchase homes.
Our coalition’s brief focused on the remedy if the Supreme Court found against CFPB and did not make any arguments concerning the constitutionality of the funding scheme.
The attorneys for both parties received strong questioning from the justices concerning CFPB’s funding and how it could craft a remedy if it found the CFPB’s funding is unconstitutional. Solicitor General Elizabeth Prelogar specifically mentioned NAHB’s brief when she suggested that the Supreme Court could address only the funding — and not the rules — that the CFPB has developed.
Moreover, Justice Sonia Sotomayor stated her concern about the market disruption that would occur if the Supreme Court jettisoned the rules that the mortgage market relies on. The attorney for the Community Financial Services Association (CFSA) suggested that the Supreme Court could stay its decision and send the case to Congress so it could develop a different way to fund the CFPB.
In the end, both liberal and conservative justices seemed to have trouble understanding the CFSA’s argument that the CFPB funding scheme violated the Appropriations Clause. Justice Clarence Thomas specifically commented that it was not enough to argue that Congress has never funded an agency in this manner; there must be a reason why that violates the Constitution.
NAHB expects a decision by early 2024.
Latest from NAHBNow
Jun 18, 2026
Fed Drops Easing Bias, Clouding Near-Term Outlook for Housing MarketDespite a change in leadership, the Federal Reserve decided not to change interest rates at the June Federal Open Market Committee (FOMC) meeting Wednesday. It was the fourth consecutive meeting in which the short-term federal funds rate stayed the same at a top rate of 3.75%.
Jun 17, 2026
Apply Now To Become the Next National Associate ChairA National Associate Chair's role is is to bring Associate initiatives, questions and concerns to the other Builder NACs and the senior officers of NAHB for collaboration.
Latest Economic News
Jun 18, 2026
Gains for Household Real Estate AssetsThe market value of households’ real estate assets rose to a new high in the first quarter reaching $48.7 trillion, according to the most recent release of U.S. Federal Reserve Z.1 Financial Accounts. This level is 1.7% higher than in the fourth quarter and is 2.6% higher than a year ago.
Jun 17, 2026
A Laconic Statement: Hawkish Hold and New Plans from the FedWith a new Fed Chair and plans for evolving operating strategies, the Federal Reserve maintained its target policy rate at the conclusion of the June Federal Open Market Committee (FOMC) meeting. For the fourth consecutive meeting, the FOMC maintained the short-term federal funds rate at a top rate of 3.75%.
Jun 16, 2026
Housing Starts Weaken in May as Multifamily Construction SlowsHousing starts fell sharply in May, driven by a steep drop in multifamily construction. Meanwhile, single-family buildings also slipped amid high interest rates, rising construction costs and ongoing labor shortages.