Subject: Two USSC Surprises in Two Days
The new term of the Supreme Court just began October 2 but two suprises have already emerged from the first two days.

First, the USSC appears to have little interest in the rationale used in the lawsuit attempting to eliminate the Consumer Financial Protection Bureau. In arguments before the court, the idea that creation of the CPFB by Congress violated the Constitution by establishing a funding mechanism for the CPFB drawing from the Federal Reserve (up to about $735 million per year for 2023) without requiring direct appropriations by Congress is being sliced to shreds by multiple justices including Kavanaugh and Barrett.

Prior to the beginning of oral arguments, it was assumed by many the conservatives on the court would use this case as an opportunity to continue its campaign to roll back the power of the Executive Branch's administrative powers to extend federal laws beyond what the justices believe the original legislation could have intended.

It could be that the justices ultimately reject this case, recognizing the claim about Congress improperly ceding its funding authority decisions as completely bogus and thus a thin excuse for simply terminating a program conservatives never wanted but don't have the political power to terminate via democratic mechanisms.

Of course, it's more likely that the justices are simply choosing to selectively implement what are already selectively utilized excuses for axing laws and administrative precedents they don't like because other special interests also favored by conservatives don't want this agency eliminated. In this case, the Mortgage Bankers Association has made it clear they WANT the CFPB kept in place to avoid a sudden vacuum in disclosure / fairness regulations that could result in chaos in lending markets. On the other hand, the payday lending sector was very much in favor of eliminating the CFPB. Hmmmm. I wonder why...

According to the CFPB's own public talking points, it has triggered the return of roughly $17.5 billion dollars to consumers from actions taken against firms like Bank of America, Wells Fargo, Trans Union and others since its creation in 2010. While its charter includes a limit on how much it can draw from the Federal Reserve for operations, it is operating below that cap (cap of $735 million for 2023, currently only drawing about $641 million). With a worst case estimate of that spending rate since 2010, that means $641 x 13 = $8.3 billion in enforcement costs have returned $17.5 billion to consumers. Over a 2x payoff.

Based on this initial vibe from oral arguments, one can only surmise the Weather Channel will soon be reporting sleet and freezing rain in Hell in the near future.

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Second, the USSC rejected a request to hear an appeal from two lawyers sanctioned with a combined $187,000 in fines for their work on behalf of Donald Trump regarding the 2020 vote. The two lawyers filed lawsuits in Colorado against Meta, Dominion Voting Systems and the Center for Civic and Tech Life (????), alleging coordination between the parties to interfere with the election. The original judge hearing their suit issued the sanctions in August of 2021 and blasted them at the time:

"This lawsuit was filed with a woeful lack of investigation into the law and, under the circumstances, the facts," Neureiter wrote. "The lawsuit put into or repeated into the public record highly inflammatory and damaging allegations that could have put individuals' safety in danger. Doing so without a valid legal basis or serious independent personal investigation into the facts was the height of recklessness."

The lawsuit, the judge concluded, was "one enormous conspiracy theory" and arguments made by the lawyers "crossed the border into the frivolous."

In this vein, the USSC seems to be reacting consistently to situations involving blatant disrespect of lower courts on the part of litigants who are caught submitting falsehoods in filings or unfounded justifications for motions that amount to professional misconduct. They clearly need more work in this area to recognize the same disrespect to judicial institutions reflected by their own members.


WTH