by Pam Martens and Russ Martens, Wall St On Parade:

Last Thursday, in a stunning 7-2 win for the little guys and gals in America, the U.S. Supreme Court handed down its decision in Consumer Financial Protection Bureau et al v Community Financial Services Association of America, Ltd., et al. Making the decision all the more stunning, it was written by Clarence Thomas, the sitting justice who has been under withering attack in the press for selling out to special interests. (There is speculation that the Thomas name is on the decision to quiet the media uproar against him.) The two dissenting votes came from Justices Samuel Alito (target of a ProPublica investigation in 2023) and Neil Gorsuch, around whom conflicts of interest controversy is also swirling.

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The Consumer Financial Protection Bureau (CFPB) has been the target of Wall Street lobbyists since before its birth under the Dodd-Frank financial reform legislation of 2010 and every year since. Dodd-Frank and the creation of the CFPB came as a Congressional response to the greatest fraudulent wealth transfer from the middle class to the 1 percent since the Wall Street frauds of the late 1920s. Both periods devastated the U.S. economy for years and left millions of Americans unemployed and their savings wiped out.

Wall Street megabanks and other bad financial actors are particularly hostile to the fact that the CFPB allows consumers who have been victimized by financial firms, even where small amounts of money are involved, to file a complaint with the CFPB, which then demands a timely written explanation from the alleged wrongdoer. Bad actors dislike the fact that these complaints go into a permanent database at the CFPB, which can be mined by the public, reporters, attorneys and prosecutors looking for patterns of fraud.

On May 15 of last year, Senator Sherrod Brown (D-OH), Chairman of the Senate Banking Committee and Congresswoman Maxine Waters (D-CA), Ranking Member of the House Financial Services Committee, led 144 current and former members of Congress in filing an amicus brief in the Supreme Court case. Their amicus argues that when Congress established the CFPB after the 2008 financial crisis, a judgment was made that the CFPB, like other financial regulators, needed independence from unpredictable annual funding cycles to be effective. As legislated in the Dodd-Frank Act, the CFPB is funded through the Federal Reserve. Congress maintains oversight authority of the CFPB, and the Director of the agency testifies regularly before Congress.

The Community Financial Services Association of America, the opposing front group in the Supreme Court case, which cleverly put the homespun word “Community” in its name, is the evil twin sister of the CFPB. It’s a pool of financial sharks, including payday lenders, who don’t want a well-funded federal investigatory agency looking into their predatory practices against financially-strapped and/or financially unsophisticated Americans.

The case arrived at the Supreme Court reeking of stench from a decision handed down by a three-judge panel at the radical right-wing 5th Circuit Court of Appeals. All three judges on the panel (Don Willett, Kurt Engelhardt, and Cory Wilson) were appointed by former President Donald Trump. The 5th Circuit effectively ruled that the CFPB’s funding system, legislated by Congress, was unconstitutional.

The tentacles of the former Trump administration and the invisible hands that had an outsized role in setting the agenda for it, fossil fuels billionaire Charles Koch and his corporate law firm, Jones Day, have their fingerprints all over this case. On Trump’s first day in office on January 20, 2017, Jones Day announced that 12 of its law partners were moving into the Trump administration. Among the 12 was Noel Francisco, who became Trump’s Solicitor General. Francisco became one of the five Jones Day lawyers that argued before the Supreme Court for the dodgy front group CFSA that brought this case against the CFPB.

CFSA is a nonprofit, which means that at least part of its annual tax filing with the IRS (form 990) is a public document. The 990s show that Jones Day is not just representing CFSA at the Supreme Court but that Jones Day has been its law firm dating back to at least 2016. The annual amounts received by Jones Day from CFSA are as follows: 2021 –  $751,150; 2020 – $377,019; 2018 – $571,822; 2017 – $516,150; and 2016 – $574,613.

Gutting the funding and power of federal regulatory agencies is something that Charles Koch and his myriad front groups have been attempting to do for the past 40 years. For Wall Street On Parade’s investigative reporting on the insidious ties between Charles Koch and Clarence Thomas (as he sat on the Supreme Court) see here.

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