Since the earliest days of our Republic, Congress's “power over the purse” has been its “most complete and effectual weapon” to ensure that the other branches do not exceed or abuse their authority. The Federalist No. 58, p. 359 (C. Rossiter ed. 1961) (J. Madison). The Appropriations Clause protects this power by providing that “[n]o Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” Art. I, § 9, cl. 7. This proPage Proof Pending Publication 448 CONSUMER FINANCIAL PROTECTION BUREAU v. COMMUNITY FINANCIAL SERVICES ASSN. OF AMERICA, LTD.
vision has a rich history extending back centuries before the founding of our country. Its aim is to ensure that the people's elected representatives monitor and control the expenditure of public funds and the projects they fnance, and it imposes on Congress an important duty that it cannot sign away. “Any other course” would give the Executive “a most dangerous discretion.” Reeside v. Walker, 11 How. 272, 291 (1851).
Unfortunately, today's decision turns the Appropriations Clause into a minor vestige. The Court upholds a novel statutory scheme under which the powerful Consumer Financial Protection Bureau (CFPB) may bankroll its own agenda without any congressional control or oversight. According to the Court, all that the Appropriations Clause demands is that Congress “identify a source of public funds and authorize the expenditure of those funds for designated purposes.” Ante, at 426. Under this interpretation, the Clause imposes no temporal limit that would prevent Congress from authorizing the Executive to spend public funds in perpetuity. Contra, Montesquieu, The Spirit of the Laws, bk. XI, ch. VI, p. 160 (O. Piest ed., T. Nugent transl. 1949) (warning that a legislature will lose its power of the purse if it passes an appropriation that lasts “forever”). Nor does the Court's interpretation require Congress to set an upper limit on the amount of money that the Executive may take. Today's decision does not even demand that an agency's funds come from the Treasury. As the Solicitor General admitted at argument, under this interpretation, the Appropriations Clause would permit an agency to be funded entirely by private sources. Tr. of Oral Arg. 34–35. In short, there is apparently nothing wrong with a law that empowers the Executive to draw as much money as it wants from any identifed source for any permissible purpose until the end of time.
That is not what the Appropriations Clause was understood to mean when it was adopted. In England, ParliaPage Proof Pending Publication ment had won the power over the purse only after centuries of struggle with the Crown. Steeped in English constitutional history, the Framers placed the Appropriations Clause in the Constitution to protect this hard-won legislative power.
I
In the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress created the CFPB, an independent regulatory agency with “vast rulemaking, enforcement, and adjudicatory authority over a signifcant portion of the U. S. economy.” Seila Law LLC v. Consumer Financial Protection Bureau, 591 U. S. 197, 203 (2020); see id., at 222, n. 8. And in designing the CFPB, “Congress deviated from the structure of nearly every other independent administrative agency in our history.” Id., at 203. At every turn, the statute attempted to insulate the CFPB from control by any offcial answerable to the people. First, “Congress provided that the CFPB would be led by a single Director, who serves for a longer term than the President,” and Congress attempted to protect the Director from removal by the President “except for ineffciency, neglect, or malfeasance.” Ibid. In Seila Law, we struck down this restriction because it placed “potent” power in the hands of an offcial who was “neither elected by the people nor meaningfully controlled . . . by someone who is.” Id., at 206, 224–225.
Elected in the atmosphere that followed the fnancial crisis of 2008, the Congress that created the CFPB also sought to free the CFPB from supervision by subsequent Congresses that might wish to superintend the Bureau's exercise of its vast powers. To achieve that end, the CFPB was given an unprecedented way of obtaining funds that was expressly designed to make it totally “independent of the Congressional appropriations process.” S. Rep. No. 111–176, p. 163 (2010).
Under that scheme, the CFPB is not funded by appropriations enacted by Congress. Instead, each year, the CFPB Page Proof Pending Publication Page Proof Pending Publication 450 CONSUMER FINANCIAL PROTECTION BUREAU v. COMMUNITY FINANCIAL SERVICES ASSN. OF AMERICA, LTD.
Director tells the Federal Reserve Board of Governors how much money it thinks is “reasonably necessary” to carry out the CFPB's operations. 12 U. S. C. § 5497(a)(1). So long as this amount does not exceed 12% of the Federal Reserve System's total operating expenses, the Board of Governors must comply with that demand and hand over the specifed sum “from the combined earnings of the Federal Reserve System.” §§ 5497(a)(1), (2)(A). These earnings come from the Federal Reserve Banks, which are federally chartered corporations that are “not departments of the Government.” Emergency Fleet Corp. v. Western Union Telegraph Co., 275 U. S. 415, 426 (1928); see § 341.1 The Federal Reserve Banks' earnings represent interest on and gains derived from the purchase and sale of securities, as well as fees they receive for services provided to depository institutions, “such as check clearing, funds transfers, and automated clearinghouse operations.” United States Federal Reserve System, The Fed Explained: What the Central Bank Does 4 (11th ed. 2021); see also Brief for Petitioners 23. At present, the CFPB's maximum annual draw is nearly $750 million.2 In addition, the CFPB, unlike most agencies, does not have to return any unspent funds to the Treasury. 12 U. S. C. § 5497(b). Instead, the CFPB may invest or roll over any unspent money into a separate fund, which it may use in the future “to pay the expenses of the [CFPB] in carrying out its duties and responsibilities.” §§ 5497(b)–(c).3 As of Sep1Each Federal Reserve Bank has a Board of nine Directors—six are elected by private member banks, and three are appointed by the Federal Reserve System's Board of Governors. 12 U. S. C. §§ 302, 304. 2In the most recent fscal year, the Bureau requested $641.5 million of its then-applicable $734 million limit. Financial Report of the Consumer Financial Protection Bureau: Fiscal Year 2022, pp. 44–45 (Nov. 15, 2022) (2022 Report) (online source archived at https://www.supremecourt.gov). 3The CFPB invests these funds in 3-month Treasury bills, from which it receives an annualized return of 5%. See Board of Governors of the Federal Reserve System, 3-Month Treasury Bill Secondary Market Rate, tember 30, 2022, the CFPB had built up an endowment worth nearly $340 million. See 2022 Report, at 86.
In devising this novel scheme, Congress appears to have anticipated that it might be challenged under the Appropriations Clause, and Congress therefore attempted to shield its new creation by providing that “[f]unds obtained by or transferred to the [CFPB] shall not be construed to be Government funds or appropriated monies.” 4 § 5497(c)(2).
And to impede congressional oversight of the CFPB's use of this money, the Act added that the Bureau's funds are not “subject to review by the Committees on Appropriations.”
§ 5497(a)(2)(C).
The Framers would be shocked, even horrifed, by this scheme. Beginning with the First Congress, agencies 5 were generally funded by annual appropriations from the Treasury. K. Stith, Congress' Power of the Purse, 97 Yale L. J. 1343, 1354, n. 53 (1988) (Stith). While there have been departures from this dominant model, nothing like the CFPB's funding scheme has previously been seen. In the decision below, the Fifth Circuit held that the CFPB's unparalleled fnancial independence violates the Appropriations Clause and “the constitutional separation of powers.” 51 F. 4th 616, 642 (2022). Because I agree that the CFPB's funding structure is unconstitutional, I would affrm the Fifth Circuit's judgment.
Discount Basis, Economic Research: Federal Reserve Bank of St. Louis (Mar. 13, 2024), https://fred.stlouisfed.org/series/DTB3. 4Congress obviously cannot evade the Appropriations Clause simply by placing a different label on an authorization to obtain and spend money that falls within the meaning of an “Appropriatio[n]” under that provision. And here, the Government argues that the statutory provision cited in the text was not meant to have that effect, but was adopted for other purposes. See Tr. of Oral Arg. 20.
5For want of a better term, I use the term “agency” to refer to any component of the Executive Branch.
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II
A
The Appropriations Clause is found in Article I, § 9, clause 7, of the Constitution, which provides: “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.”
The frst part of this provision is customarily called the Appropriations Clause, and the second is referred to as the Statement and Account Clause.
The Appropriations Clause contains two key terms— “Money . . . drawn from the Treasury” and “Appropriations”—both of which require a little explanation. As the Government acknowledges, “Money . . . drawn from the Treasury” is synonymous with the term “public Money,” 6 which appears in the Statement and Account Clause. And in this case, it is undisputed that the funds requisitioned by the CFPB constitute “public Money.” 7 Thus, the only remaining textual question is whether the CFPB gets its funding from “Appropriations” in the sense in which the Constitution uses that term.
The Court answers that question by consulting a few old dictionaries, which it says establish that “[i]n ordinary usage, . . . an appropriation of public money would be a law authorizing the expenditure of particular funds for specifed ends.” Ante, at 427. It accordingly concludes that the Appropriations Clause requires no more than a law, a fund, and a purpose. Ante, at 426–427.
This analysis overlooks the fact that the term “Appropriations,” as used in the Constitution, is a term of art whose meaning has been feshed out by centuries of history. To 6See, e. g., Tr. of Oral Arg. 34; Stith 1357.
7See, e. g., Tr. of Oral Arg. 19, 34.
Page Proof Pending Publication be sure, in interpreting the Constitution, we start with the presumption that “ `its words and phrases' ” carry their “ `normal and ordinary' ” meaning. District of Columbia v. Heller, 554 U. S. 570, 576 (2008) (quoting United States v. Sprague, 282 U. S. 716, 731 (1931)). But our analysis cannot end there. Some provisions use terms with specialized and well-established meanings that we cannot use dictionaries to brush aside. “ `[I]f a word is obviously transplanted from another legal source, whether the common law or other legislation, it brings the old soil with it.' ” Sekhar v. United States, 570 U. S. 729, 733 (2013); see also A. Scalia & B. Garner, Reading Law: The Interpretation of Legal Texts 73–77 (2012). Applied here, this rule means that the term “Appropriatio[n]” should be interpreted in light of “legal tradition and . . . centuries of practice.” Morissette v. United States, 342 U. S. 246, 263 (1952). I therefore turn to that history.
B
The delegates to the Constitutional Convention did not invent the appropriations requirement. Rather, that important safeguard arose from centuries of “British experience.” Consumer Financial Protection Bureau v. All Am. Check Cashing, Inc., 33 F. 4th 218, 224 (CA5 2022) (en banc) (Jones, J., concurring). The Framers were aware of the requirement's deep roots and the critical role it had played in “the history of the British Constitution.” The Federalist No. 58, at 359. By steadily asserting the power to condition appropriations, the House of Commons, originally “an infant and humble representation of the people[,] gradually enlarg[ed] the sphere of its activity and importance, and fnally reduc[ed], as far as it seems to have wished, all the overgrown prerogatives of the other branches of the government.”
Ibid. A short summary of this process illustrates the important role of the appropriations requirement. During the Middle Page Proof Pending Publication 454 CONSUMER FINANCIAL PROTECTION BUREAU v. COMMUNITY FINANCIAL SERVICES ASSN. OF AMERICA, LTD.
Ages, kings relied almost entirely on what was called “ordinary” revenue. F. Maitland, The Constitutional History of England 433 (1908) (reprint 1993) (Maitland). This included income from lands owned by the Crown, customs duties, and feudal dues. See 1 W. Blackstone, Commentaries on the Laws of England 281–306 (2d ed. 1766). Consequently, there was little meaningful difference “between the national revenue and the king's private pocket-money.” Maitland 433.
The Crown's fnancial independence gave it the ability to govern with little parliamentary interference. As Maitland puts it, “throughout the Middle Ages the king's revenue had been in a very true sense the king's revenue, and parliament had but seldom attempted to give him orders as to what he should do with it.” Id., at 309. “Under the Tudors, parliament hardly dared to meddle with such matters.” Ibid. In the 17th century, however, this pattern began to change. Id., at 309–310. By that time, “the king's ordinary revenues were no longer even remotely suffcient to cover the normal costs of royal governance,” and the heavy expenditures of James I and Charles I exacerbated the problem. J. Chafetz, Congress's Constitution 47 (2017) (Chafetz). Rather than seeking appropriations from Parliament, the early Stuart kings engaged in controversial efforts to obtain additional ordinary income through the use of various royal “prerogative[s].” G. Smith, A Constitutional and Legal History of England 315 (1955) (Smith). Among other things, they unilaterally imposed duties on imports, stepped up the collection of feudal dues, sold monopolies, and forced individuals to loan money on pain of imprisonment. See id., at 315, 318. These measures aroused opposition and, in any event, did not yield suffcient funds. As a result, James I and Charles I periodically found it necessary to ask Parliament to impose new taxes in order to obtain the funds they wanted. When they did so, the Commons began to fex the power of the purse and to demand a measure of royal accountability. DisPage Proof Pending Publication putes between the Commons and the Stuart kings about the power of the purse played a pivotal role in the transition from royal to parliamentary fnancial supremacy.
A few incidents illustrate this dynamic. In 1621, the power of the purse played a central role in disputes between the Crown and Parliament over religious, geopolitical, and judicial authority. For some months, Parliament ignored requests from James I for more tax revenue. T. Taswell- Langmead, English Constitutional History From the Teutonic Conquest to the Present Time 532 (3d ed. 1886) (Taswell-Langmead). Though Parliament fnally expressed “willing[ness] to grant a moderate subsidy,” it insisted “frst” on redress for “grievances.” Id., at 533; see also Smith 315– 316. Parliament's petition infuriated James I, who ultimately dissolved Parliament and sent several of its leaders— including Sir Matthew Hale—to the Tower of London.
Taswell-Langmead 534, 536.
Under Charles I, the situation worsened. At the beginning of his reign, the Commons refused to grant him the life-time power to impose tonnage and poundage duties, i. e., duties on imports and exports, as had been the custom, but instead granted the power for only one year. Id., at 539. The members of Commons “had no intention of refusing a further supply, but were resolved to avail themselves of their Constitutional right to make it dependent upon redress of grievances.” Ibid. Indignant about this temerity, the King hastily dissolved Parliament before the Lords passed the bill. Id., at 540; Smith 318. But as a consequence, the King once again then found himself without suffcient funds. So he took matters into his own hands by resorting to the monarchy's “old illegal methods of raising money.” Taswell- Langmead 543.
This reignited a power struggle between the two branches. As a result, when Charles I again turned to Parliament in 1628, the Commons refused to grant funds until he agreed to the Petition of Right, which demanded that he Page Proof Pending Publication 456 CONSUMER FINANCIAL PROTECTION BUREAU v. COMMUNITY FINANCIAL SERVICES ASSN. OF AMERICA, LTD.
cease efforts to obtain more “ordinary income” by objectionable means, such as compulsory loans and the payment of “any tax, tallage,8aid, or other like charge not set by common consent, in parliament.” 3 Car. I., c. 1 (1628). The King, of course, did not like this. So when the Commons continued to challenge royal prerogatives, Charles I prorogued Parliament. And during the long period that ensued in which Parliament did not meet (1629–1640), the King sought new sources of “ordinary income,” including the imposition of “Ship-money,” that is, fees imposed on both maritime and inland counties to pay for the construction of ships. Taswell-Langmead 566–569. These practices “further enraged an already alienated Parliament, reinforcing a vicious cycle that led to the Civil War and, ultimately, to Charles's beheading.” Chafetz 47.
This constitutional crisis restored the English Government's fnancial separation of powers for a season. During the Commonwealth, the Commons exercised “complete authority . . . over the whole receipts and expenditure of the national treasury.” Taswell-Langmead 626. But shortly after the Restoration, the war for the supremacy of the purse reignited. Starting in 1665, “Parliament was largely unwilling to grant [the King] additional money without specifying in some measure how it was to be used.” Chafetz 50.
“This precedent was followed in some, but not all . . . cases under Charles II.” Maitland 310. Charles II, “fed up with parliamentary interference, ruled without Parliament, and therefore without any parliamentary taxation, for the rest of his reign.” Chafetz 50.
After the Revolution of 1688, Parliament took strong measures to curb the Crown's fnancial independence. The 1689 Bill of Rights declared “[t]hat levying Money for or to the Use of the Crowne by pretence of Prerogative, without 8A tallage is “[a]n arbitrary tax levied by the monarch on towns and lands belonging to the crown.” Black's Law Dictionary 1756 (11th ed. 2019).
Page Proof Pending Publication Grant of Parlyament for longer time or in other manner than the same is or shall be granted is Illegall.” 1 Wm. & Mary 2, c. 2 (1688). In other words, to ensure “that it was supreme in directing the use of [all] public funds,” Parliament “asserted that any use of funds by the monarch that lacked Parliament's authorization was unlawful.” Congressional Research Service, S. Stiff, Congress's Power Over Appropriations: Constitutional and Statutory Provisions 8 (2020).
These steps, however, did not cement Parliament's power of the purse. Royal offcers continued to collect revenue and to evade the appropriations requirement by exaggerating collection costs, giving very little in “net receipts” to Parliament, and keeping the rest for the use of the Crown. P. Einzig, The Control of the Purse 164, 188 (1959) (Einzig). So Parliament took steps to crack down on this practice. Id., at 188. In 1711, for example, Parliament passed a resolution declaring that “ `applying any sum of un-appropriated money, or surplusages of funds to usages not voted, or addressed for by parliament, hath been a misapplication of the public money.' ” 6 Cobbett's Parliamentary History of England 1025 (1810).
Parliament also appointed a commission to prevent the Crown from defying the appropriations requirement. In that commission's very frst report, it recommended that “[r]evenue should come from the Pocket of the Subject directly into the Exchequer.” Report Relative to the Balances in the Hands of the Receivers General of the Land Tax, Nov. 27, 1780 (First Report), reprinted in 1 Reports of the Commissioners Appointed To Examine, Take, and State the Public Accounts of the Kingdom 14 (W. Molleson ed.
1783). Permitting revenue departments to retain or divert any public funds, the Commissioners concluded, would create a “private Interest . . . in direct Opposition to that of the Public.” Ibid. Finally, Parliament took an increasingly “frmer line . . . against virement, that is, the transfer of Page Proof Pending Publication 458 CONSUMER FINANCIAL PROTECTION BUREAU v. COMMUNITY FINANCIAL SERVICES ASSN. OF AMERICA, LTD.
funds appropriated for one department for the use of another department.” Einzig 144.
The Court's treatment of this history begins by conceding most of what I have recounted. The Court notes that after the Revolution of 1688, “Parliament's usual practice was to appropriate government revenue `to particular purposes more or less narrowly defned,' ” and “Parliament began limiting the duration of its revenue grants.” Ante, at 428 (quoting Maitland 433). “ `Every year,' ” the Court continues, the King and his ministers “ `had to come, cap in hand, to the House of Commons, and more often than not the Commons drove a bargain and exacted a quid pro quo in return for supply.' ” Ante, at 429 (quoting G. Trevelyan, The English Revolution of 1688–1689, pp. 180–181 (1939)).
In an effort to fnd a trace of helpful precedent in prefounding British constitutional history, the Court turns to laws appropriating funds for the “civil list,” which it touts as a particularly “notable exception” to the centuries-long understanding of appropriations. Ante, at 429, 432, 439. In truth, however, Parliament's treatment of the civil list actually undermines the Court's position. The civil list, although renamed in 2012, remains to this day, and it consists of the money needed to cover the expenses of the royal family.9 By the end of the 17th century, “the Civil List was a relatively small share of the total public expenditure,” but the independence it afforded the Crown “presented a constitutional problem in the confict between the principle of the independence of the Crown and the principle of parliamentary control of fnance.” E. Reitan, The Civil List in Eighteenth-Century British Politics: Parliamentary Supremacy Versus the Independence of the Crown, 9 Hist. J. 318, 320, 322 (1966) (Reitan).
9 See Royal Finances, https://www.royal.uk/royal-finances (Apr. 22, 2024).
Page Proof Pending Publication Page Proof Pending Publication To prevent the Crown from using the civil list to erode Parliament's hard-fought supremacy over the purse, eminent statesmen like Edmund Burke and Charles James Fox began pushing for substantial reforms. Id., at 328–337. Beginning in 1760, Parliament enacted a series of laws that altered the appropriation of civil list funds. Id., at 324; see, e. g., 1 H. Cavendish, Debates of the House of Commons 267–307 (1841). And by 1782, Parliament fnally secured its “right . . . to interfere at its discretion in the affairs of the Civil List.” Reitan 336–337. “The eighteenth-century tension between the conficting principles of parliamentary supremacy and an independent fnancial provision for the Crown had been resolved—as it had to be—in favour of parliamentary supremacy.” Id., at 337.
C
“The conficts between Parliament and the Crown over the power of the purse . . . were replayed in the American colonies in struggles between the royal governors and provincial assemblies.” R. Rosen, Funding “Non-Traditional” Military Operations: The Alluring Myth of a Presidential Power of the Purse, 155 Mil. L. Rev. 1, 44 (1998); see also P. Wolfson, Is a Presidential Item Veto Constitutional? 96 Yale L. J. 838, 841–842 (1987). But learning from Parliament's experiences with the monarchy, some of the American Colonies assumed appropriations authority “greater even than that of the British House of Commons,” exercising signifcant auditing powers and legislative oversight. J. Greene, The Quest for Power: The Lower Houses of Assembly in the Southern Royal Colonies 106 (1963). Indeed, by 1787, all but one of the 11 State Constitutions provided their respective legislatures with some control over appropriations; and no State allowed the executive to draw money from the state treasury without legislative approval. Chafetz 55, and nn. 119–120 (citing provisions); see also The Federalist No. 48, at 310 460 CONSUMER FINANCIAL PROTECTION BUREAU v. COMMUNITY FINANCIAL SERVICES ASSN. OF AMERICA, LTD.
(J. Madison) (noting that, under many state constitutions, “the legislative department alone has access to the pockets of the people”).
The Framers built on this legacy at the Constitutional Convention when they adopted the Appropriations Clause, which they “well understood” would “complet[e] the power vested in Congress over money.” 7 Annals of Cong. 1124 (1798) (statement of Rep. Albert Gallatin). The Clause not only “gives to the Legislature an exclusive authority of raising and granting money,” but it also obligates Congress to keep that authority from “the hands of the Executive” at all times thereafter. Ibid. It makes the President “depen[d] on the will of [Congress] for supplies of money” in the frst instance and puts him continually “in a state of subordinate dependence” to the people's elected representatives. 3 Debates on the Constitution 17 (J. Elliot ed. 1836) (statement of Wilson Nicholas). The Appropriations Clause enables Congress, “without the concurrence of the other branches, to check, by refusing money, any mischief in the operations carrying on in any department of the Government.” 5 Annals of Cong. 509 (1796) (statement of Rep. William Branch Giles) (emphasis added).
Early budgets illustrate how the appropriations power was understood. Although the Constitution does not require that appropriations be limited to a single year, that was the dominant practice in the years immediately following the adoption of the Constitution. See ante, at 432. And while the frst few appropriations laws were brief and lacked details about how the money was to be spent, the amounts approved closely tracked the estimates submitted by Secretary of the Treasury Alexander Hamilton. See Chafetz 58–59. Indeed, the second appropriations act expressly incorporated the estimates of specifc expenses contained in Hamilton's report to Congress. Compare Appropriations Act, § 1, 1 Stat. 104, with 5 American State Papers: Finance Page Proof Pending Publication 33 (1832). As a result, Congress clearly contemplated that the money would be devoted toward particular purposes.
In the mid-1790s, appropriations laws became even more specifc. Chafetz 59. And when Thomas Jefferson became President, he urged Congress “to multiply barriers against” the “dissipation” of public funds by “appropriating specifc sums to every specifc purpose susceptible of defnition,” and “by disallowing applications of money varying from the appropriation in object, or transcending it in amount.” First Annual Message (Dec. 8, 1801), reprinted in 9 The Works of Thomas Jefferson 336 (P. Ford ed. 1905); see also Letter from Albert Gallatin to Thomas Jefferson (Nov. 1801), reprinted in 1 The Writings of Albert Gallatin 68 (H. Adams ed. 1879) (“Congress should adopt such measures as will effectually guard against misapplication of public moneys”).
To be sure, not all early funding laws followed the dominant model of specifed short-term appropriations. Agencies that provided services to a particular segment of the public were funded by fees that were paid by the recipients of those services. See, e. g., Act of Feb. 20, 1792, §§ 2–3, 1 Stat. 233–234 (funding the Post Offce through collection of postage rates); Act of Apr. 2, 1792, ch. 16, §§ 1, 14, 1 Stat. 246, 249 (funding the National Mint in part through collection of fees); Act of July 31, 1789, § 29, 1 Stat. 44–45 (funding customs collection through tonnage fees). If these fees exceeded the costs of providing the services, however, these agencies were required to send the surplus to the Treasury, which oversaw the collection and use of such fees.10 10At the founding, it was well understood that “the unexpended balance of any appropriation after a given period passes to the surplus fund.” 16 Annals of Cong. 393 (1807) (statement of Rep. David Thomas). See, e. g., Act of Feb. 11, 1791, ch. 6, 1 Stat. 190 (recognizing default rule that surplus funds return to the Treasury); see also Act of Feb. 20, 1792, §§ 3–4, 1 Stat. 234 (requiring the Postmaster General to “pay, quarterly, into the treasury of the United States, the balance” of any receipts after using them to “defray the expense” of services provided); Act of July 31, 1789, § 38, 1 Page Proof Pending Publication 462 CONSUMER FINANCIAL PROTECTION BUREAU v. COMMUNITY FINANCIAL SERVICES ASSN. OF AMERICA, LTD.
As the Government notes, Brief for Petitioners 21–22, this practice had deep historical roots, see N. Parrillo, Against the Proft Motive 65 (2013) (Parrillo),11and was presumably based on the idea that the cost of providing certain services should be borne by the recipients of those services rather than the general public. At the same time, the requirement that fees in excess of what was needed to defray the cost of providing services be turned over to the Treasury ensured that Congress maintained control over the ways in which this money was spent. Under these arrangements, therefore, Congress exercised close control over both the amount of money that the agencies in question obtained and the way in which that money was used. The agencies received and were allowed to use the amount of money necessary to provide their narrowly prescribed services. All the rest was sent to the Treasury and could then be used only as authorized by a congressional appropriation.
In discussing this early American history, the Court begins by essentially conceding the principal lesson outlined above. As the Court candidly puts it, “ `[w]hen called upon to grant supplies,' the lower houses in the colonial assemblies `insisted upon appropriating them in detail.' ” Ante, at 430.12 The best the Court can muster to support its assertion that “state legislative bodies often opted for open-ended, discretionary appropriations” are a few minor state laws that, when understood in relation to the Constitutions of the Stat. 48 (providing that an unexpended portion of all customs and fnes shall be “paid into the treasury” thereof); Act of Sept. 2, 1789, ch. 12, §2, 1 Stat. 65 (“[I]t shall be the duty of the Secretary of the Treasury to . . . superintend the collection of the revenue”).
11Parliament and “nearly all the American colonial legislatures” used such fees “to cover many and sometimes all of the offces within their respective bounds.” Parrillo 65.
12Many sources document this general approach. See, e. g., P. Figley & J. Tidmarsh, The Appropriations Power and Sovereign Immunity, 107 Mich. L. Rev. 1207, 1244 (2009).
Page Proof Pending Publication States in question, provide no support for the Court's argument. Ibid.13 * * * In sum, centuries of historical practice show that the Appropriations Clause demands legislative control over the source and disposition of the money used to fnance Government operations and projects.14 13Citing two Massachusetts laws directing that certain revenue be used for broadly defned purposes, the Court infers that the executive enjoyed wide discretion to decide how this money would be spent, see ante, at 430, but this inference is unwarranted. One of the two Massachusetts laws cited by the Court, Act of Nov. 17, 1786, 1786 Mass. Acts and Laws ch. 47, p. 117, clearly illustrates this point. That law stated expressly that the revenue in question was to be paid “into the Treasury of this Commonwealth, for the exigencies of Government.” Ibid. Under the State Constitution, this money could not be taken from the treasury without the approval of the legislature. See Mass. Const. of 1780, ch. 2, § 1, Art. XI. And to fortify legislative control, the state treasurer was elected annually by the legislature. Id., ch. 2, §4.
As another supposed example of a state law giving the executive wide discretion to decide how funds could be spent, the Court cites a Maryland law specifying that certain revenue was to be used for the general purpose of defending the Chesapeake Bay and protecting trade. 1783 Md. Acts ch. 26, § 5, reprinted in 1 W. Kilty, The Laws of Maryland (1799). The Court overlooks the fact that under the State's Constitution, the two state treasurers were appointed by and served at the pleasure of the legislature, Maryland Constitution of 1776, Art. XIII, and the legislature was specifcally authorized to “examine and pass all accounts of the State, relating either to the collection or expenditure of the revenue, or appoint auditors, to state and adjust the same,” Art. X.
Finally, the Court points to a Virginia law, ante, at 430, but again the Court overlooks the structure of the Virginia government. Under the Virginia Constitution of 1776, the treasurer was elected annually by the legislature, and this obviously gave the legislature extensive power over expenditures. Virginia Constitution of 1776, ¶17; see Chafetz 55 (referring to the Virginia Legislature's authority over the state treasurer as an “explicit mechanism of legislative control over appropriations”). 14Not content to rest on the Court's argument, which relies on the Court's understanding of the original meaning of the Appropriations Clause, four Justices advance an entirely different rationale, namely, that congressional practice in the ensuing centuries supports the constitutionPage Proof Pending Publication 464 CONSUMER FINANCIAL PROTECTION BUREAU v. COMMUNITY FINANCIAL SERVICES ASSN. OF AMERICA, LTD.
III
A
As the previous discussion shows, today's case turns on a simple question: Is the CFPB fnancially accountable to Congress in the way the Appropriations Clause demands?
History tells us it is not. As we said in Seila Law, “ `[p]erhaps the most telling indication of [a] severe constitutional problem' with an executive entity `is [a] lack of historical precedent' to support it.” 591 U. S., at 220 (quoting Free Enterprise Fund v. Public Company Accounting Oversight Bd., 561 U. S. 477, 505 (2010)). And the Government agrees with this principle. In its briefng and at argument, the Government admitted that an utterly unprecedented funding scheme would raise a serious constitutional problem. Reply Brief 18; Tr. of Oral Arg. 11, 26. The Government therefore attempts to show that there is ample precedent for the CFPB scheme, but that effort fails.
The CFPB's funding scheme contains the following features: (1) it applies in perpetuity; (2) the CFPB has discretion to select the amount of funding that it receives, up to a statutory cap; (3) the funds taken by the CFPB come from other entities; (4) those entities are self-funded corporations that obtain their funding from fees on private parties, “not departments of the Government,” Emergency Fleet Corp., 275 U. S., at 426; (5) the CFPB is not required to return unality of the CFPB's scheme. Ante, at 441 (Kagan, J., concurring). This argument is doubly fawed. First, the concurrence cannot point to any other law that created a funding scheme like the CFPB's. Second, as explained by Justice Scalia, the separation of powers mandated by the Constitution cannot be altered by a course of practice at odds with our national charter. See NLRB v. Noel Canning, 573 U. S. 513, 571–572 (2014) (opinion concurring in judgment). “[P]olicing the `enduring structure' of constitutional government when the political branches fail to do so is `one of the most vital functions of this Court.' ” Id., at 572 (quoting Public Citizen v. Department of Justice, 491 U. S. 440, 468 (1989) (KenPage Proof Pending Publication spent funds or transfer them to the Treasury; and (6) those funds may be placed in a separate fund that earns interest and may be used to pay the CFPB's expenses in the future. At argument, the Government was unable to cite any other agency with a funding scheme like this, see Tr. of Oral Arg. 31–33, 39–41, and thus no other agency—old or new—has enjoyed so many layers of insulation from accountability to Congress.
The Government points to the Post Offce and the Customs Service as founding-era precedents for the CFPB, but the analogy is fawed. As noted, funding Government agencies with fees charged to the benefciaries of their services has long been viewed as consistent with the appropriations requirement. And both the Post Offce and the Customs Service fell comfortably into that category.
A quick look at the laws that set up the Post Offce and the Customs Service shows that they were nothing like the CFPB. In the Act establishing the Post Offce, Congress gave that agency a narrow and specifc mission: to “provide for carrying the mail of the United States.” See, e. g., Act of Feb. 20, 1792, § 3, 1 Stat. 234. The Postmaster's discretionary authority was modest. (He could, for example, decide whether mail should be carried on particular routes “by stage carriages or horses.” Ibid.) The Act specifed in minute detail the fees that could be collected from those who used the Post Offce's services. § 9, id., at 235. And it required the Postmaster to “render to the secretary of the treasury, a quarterly account of all the receipts and expenditures” and to “pay, quarterly, into the treasury . . . , the balance in his hands.” § 4, id., at 234. Under this arrangement, Congress controlled the amount that the Post Offce took in (i. e., the sum total of the fees specifed by law) and how those fees were to be spent (i. e., to provide for carrying the mail).
Much the same is true with respect to the Customs Service, which the Government claims “best” resembles the Page Proof Pending Publication 466 CONSUMER FINANCIAL PROTECTION BUREAU v. COMMUNITY FINANCIAL SERVICES ASSN. OF AMERICA, LTD.
CFPB. Tr. of Oral Arg. 31. Like the Post Offce, the Customs Service had a carefully delineated mission—basically, to control imports and exports, and to collect duties and other payments from those engaged in those activities. To maintain accountability, the early tariff Acts spelled out in excruciating detail the various fees, fnes, and forfeitures that offcers were to collect, as well as the salaries and commissions that were to be paid out of those receipts. Act of July 31, 1789, ch. 5, 1 Stat. 29–49; L. Schmeckebier, The Customs Service: Its History, Activities and Organization 3–6 (1924). Surplus funds had to be sent to the Treasury, Act of July 31, 1789, §§ 9, 38, 1 Stat. 38, 48, and for many years, these funds were the lifeblood of the Federal Government. From 1789 to 1862, “[n]early all of federal revenue was derived from customs duties.” A. Reamer, Before the U. S. Tariff Commission: Congressional Efforts To Obtain Statistics and Analysis for Tariff-setting, 1789–1916, in A Centennial History of the United States International Trade Commission 35 (2017).15 The CFPB, by contrast, is an entirely different creature. Its powers are broad and vast. It enjoys substantial discretionary authority. It does not collect fees from persons and entities to which it provides services or persons and entities that are subject to its authority. And it is permitted to keep and invest surplus funds. In short, the Government's “best” argument fails.
The Government's next-best analogs fare no better. Moving to modern agencies, the Government claims that the CFPB's funding scheme is not materially different from the funding schemes of a list of other currently existing agencies. See Brief for Petitioners 22–23, 29–36 (comparing the CFPB to the Offce of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the National 15“In 1792, for example, customs duties . . . accounted for $3.4 million of the $3.7 million of total government receipts.” Founding Choices: American Economic Policy in the 1790s, p. 101 (D. Irwin & R. Sylla eds. 2010). Page Proof Pending Publication Credit Union Administration (NCUA), the Farm Credit Administration (FCA), the Federal Housing Finance Agency (FHFA), and others).
But unlike the CFPB, the agencies cited by the Government are funded in whole or in part by fees charged to those who make use of their services or are subject to their regulation. This is true for the OCC, see 12 U. S. C. § 16; the FDIC, see § 1815; the NCUA, see § 1755; the FCA, § 2250; and the FHFA, see § 4516.16 For these reasons, it is undeniable that the combination of features in the CFPB funding scheme is unprecedented.
And it is likewise clear that this assemblage was no accident. Rather, it was carefully designed to give the Bureau maximum unaccountability. Our decision in Seila Law addressed part of the problem posed by this arrangement. It made the CFPB accountable to the President, but that decision did nothing to protect Congress's power of the purse. Indeed, standing alone, Seila Law worsens the appropriations problem. The appropriations requirement developed to ensure that the Executive (in England, the monarch) would be accountable to the people's elected representatives. 16The Government also suggested that the Federal Reserve Board is a close historical analog for the CFPB. Brief for Petitioners 23; Tr. of Oral Arg. 41. But that setup should not be seen as a model for other Government bodies. The Board, which is funded by the earnings of the Federal Reserve Banks, 12 U. S. C. §§ 243, 244, is a unique institution with a unique historical background. It includes the creation and demise of the First and Second Banks of the United States, as well as the string of fnancial panics (in 1873, 1893, and 1907) that were widely attributed to the country's lack of a national bank. See generally O. Sprague, History of Crises Under the National Banking System, S. Doc. No. 538, 61st Cong., 2d Sess. (1910). The structure adopted in the Federal Reserve Act of 1913 represented an intensely-bargained compromise between two insistent and infuential camps: those who wanted a largely private system, and those who favored a Government-controlled national bank. See, e. g., R. Lowenstein, America's Bank 5–8, 113–116, 265 (2015). For Appropriations Clause purposes, the funding of the Federal Reserve Board should be regarded as a special arrangement sanctioned by history.
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Seila Law, however, increased the power of the Executive over appropriations. By brandishing or wielding the threat of removal, a President may push the CFPB director to requisition the amount of money that the President thinks is appropriate and to spend that money as the President wishes. I joined the decision in Seila Law and continue to believe that it was correctly decided, but it solved only half the accountability problem that inheres in the CFPB's structure.
B
Left with no analog in history, the Government employs a divide-and-conquer strategy to defend the CFPB's funding scheme. It argues that even if no prior agency had a funding scheme with all the features of the CFPB's, the funding schemes of other presumptively constitutional agencies contain one or more of the features found in the CFPB's scheme. It then reasons that the combination of these features in the CFPB's scheme must be constitutional as well.
This argument founders for two reasons. First, the CFPB's scheme includes an important feature never before seen. As explained, the CFPB's money does not come from Congress, from private recipients of its services, or from private entities that it regulates. It does not even originate with another Government agency. Instead, the CFPB gets its money via a three-step process: The Federal Reserve Banks earn money from the purchase and sale of securities, as well as from the fees they charge for providing services to depository institutions. The Federal Reserve Banks then deliver these earnings to the Federal Reserve System. Finally, the CFPB requests an amount from the Federal Reserve Board. That feature of the CFPB scheme is entirely new.
Second, the Government's argument fails “to engage with the Dodd-Frank Act as a whole.” Seila Law, 591 U. S., at 230. By addressing the individual elements of the CFPB's setup one-by-one, the Government seeks to divert attention Page Proof Pending Publication from the combined layers that insulate the CFPB from accountability to Congress. Elements that are safe or tolerable in isolation may be unsafe when combined. In the case of the CFPB, the combination is deadly. The whole point of the appropriations requirement is to protect “the right of the people,” through their elected representatives in Congress, to “be actually consulted” about the expenditure of public money. St. George Tucker, View of the Constitution of the United States 297 (1803) (C. Wilson ed. 1999). The CFPB's design strips the people of this power.
The Federal Reserve's earnings represent “specific charges for specifc services to specifc individuals or companies.” FPC v. New England Power Co., 415 U. S. 345, 349 (1974). It would be “a sharp break with our traditions” to allow the CFPB to use these earnings to fund a broader array of governmental activities that have little-to-no relationship with those specifc charges, services, and regulated entities. National Cable Television Assn., Inc. v. United States, 415 U. S. 336, 341 (1974). By allowing the CFPB to use the Federal Reserve's earnings to enforce and implement broader consumer protection laws, Congress impermissibly removed the CFPB “from its customary orbit” as an agency, authorizing the Bureau to appropriate funds obtained from private sources “in the manner of an Appropriations Committee.” Ibid. In other words, Congress abdicated its appropriations authority, an exclusively legislative prerogative. Knote v. United States, 95 U. S. 149, 156 (1877). But Congress lacks the authority to “transfer to another branch powers which are strictly and exclusively legislative.” Gundy v. United States, 588 U. S. 128, 135 (2019) (plurality opinion) (internal quotation marks omitted).
In sum, the CFPB's unprecedented combination of funding features affords it the very kind of fnancial independence that the Appropriations Clause was designed to prevent. It is not an exaggeration to say that the CFPB enjoys a degree of fnancial autonomy that a Stuart king would envy.
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C
This autonomy has real-world consequences. The CFPB is a powerful agency with the authority to impose “substantive rules [on] a wide swath of industries” and “lev[y] knee- buckling penalties against private citizens.” Seila Law, 591 U. S., at 222, n. 8. In the last several months alone, the Bureau has announced plans to effectuate not one, but three major changes in consumer protection law. The CFPB has issued guidance cautioning fnancial institutions from “denying credit to individuals based on their [illegal] immigration status, regardless of their personal circumstances and demonstrated ability to repay.” 17 It has also begun “a rule- making process to remove medical bills from Americans' credit reports” 18and to cap overdraft fees “at an established benchmark—as low as $3.” 19 These may or may not be wise policies, but Congress did not specifcally authorize any of them, and if the CFPB's fnancing scheme is sustained, Congress cannot control or monitor the CFPB's use of funds to implement such changes. That is precisely what the Appropriations Clause was meant to prevent.
* * * The Court holds that the Appropriations Clause is satisfed by any law that authorizes the Executive to take any amount of money from any source for any period of time for any lawful purpose. That holding has the virtue of clarity, but 17Press Release, Consumer Financial Protection Bureau, CFPB and Justice Department Issue Joint Statement Cautioning That Financial Institutions May Not Use Immigration Status To Illegally Discriminate Against Credit Applicants (Oct. 12, 2023).
18Press Release, Consumer Financial Protection Bureau, CFPB Kicks Off Rulemaking To Remove Medical Bills From Credit Reports (Sept. 21, 2023).
19Press Release, Consumer Financial Protection Bureau, CFPB Proposes Rule To Close Bank Overdraft Loophole That Costs Americans Billions Each Year in Junk Fees (Jan. 17, 2024).
Page Proof Pending Publication such clarity comes at too high a price. There are times when it is our duty to say simply that a law that blatantly attempts to circumvent the Constitution goes too far. This is such a case. Today's decision is not faithful to the original understanding of the Appropriations Clause and the centuries of history that gave birth to the appropriations require- ment,20and I therefore respectfully dissent.
20At the end of its opinion, the Court suggests that broad separation of powers principles may provide more protection for Congress's power of the purse than does the Appropriations Clause. Ante, at 437–438. But we do not generally resort to broad principles when a provision of the Constitution specifcally addresses the question at hand. See County of Sacramento v. Lewis, 523 U. S. 833, 843 (1998). At any rate, since the decision below relied on both the Appropriations Clause and broad separation of powers principles, 51 F. 4th 616, 635 (CA5 2022), it is not clear why the Court does not proceed to apply those principles.
Page Proof Pending Publication Page Proof Pending Publication Reporter’s Note The attached opinion has been revised to refect the usual publication and citation style of the United States Reports. The revised pagination makes available the offcial United States Reports citation in advance of publication. The syllabus has been prepared by the Reporter of Decisions for the convenience of the reader and constitutes no part of the opinion of the Court. A list of counsel who argued or fled briefs in this case, and who were members of the bar of this Court at the time this case was argued, has been inserted following the syllabus. Other revisions may include adjustments to formatting, captions, citation form, and any errant punctuation. The following additional edits were made: p. 417, last line: “the” is inserted before “Customs” p. 430, line 16 from bottom: “the” is inserted before “duties” p. 440, lines 12 and 13 from bottom: “purposes for” is replaced with “ways in” p. 463, n. 13, line 9: the frst instance of “be” is deleted p. 467, line 5: “to” is inserted before “those”