Politics
Supreme Court rejects payday lenders' challenge to Obama-era consumer protection bureau
The Supreme Court on Thursday upheld the U.S. consumer protection agency that was created under President Obama and congressional Democrats to protect Americans from financial scams.
By a 7-2 vote, the justices rejected a constitutional claim brought by a coalition of payday lenders who had won before a panel of three Trump appointees on the 5th Circuit Court of Appeals.
The lower court had questioned the legality of the agency, ruling it was not properly “accountable to Congress” because it did not receive its funding through an annual appropriation.
Writing for the majority, Justice Clarence Thomas said early American history shows that Congress could fund the government through different means, not just through an annual appropriation.
“Based on the Constitution’s text, the history against which that text was enacted, and congressional practice immediately following ratification, we conclude that appropriations need only identify a source of public funds and authorize the expenditure of those funds for designated purposes to satisfy the appropriations clause,” he wrote in CFPB vs. Consumer Financial Services Association.
Justices Samuel A. Alito Jr. and Neil M. Gorsuch dissented.
Alito faulted the court for upholding “a novel statutory scheme under which the powerful CFPB may bankroll its own agenda without any congressional control or oversight.”
Consumer advocates welcomed the decision.
“This ruling upholds the independent funding structure that has made the CFPB a successful advocate for protecting consumers and holding big banks, payday lenders, and other financial institutions accountable,” said Devon Ombres, a legal policy director for the Center for American Progress. A ruling upholding the 5th Circuit Court “could have placed the entire financial regulatory system at risk and roiled financial markets.”
“Predatory lenders and companies that rip consumers off with illegal junk fees have been trying to undermine the CFPB since it was created,” said Lauren Saunders, associate director of the National Consumer Law Center.
In creating the new bureau, Congress decided to fund it with lending fees from the Federal Reserve. If the Supreme Court had ruled such funding was unconstitutional, its decision would have cast doubt on the Federal Reserve as well.
In defense of the bureau, Biden administration attorneys argued that throughout American history, Congress has created agencies and bureaus such as the Post Office, the National Mint, the Customs Bureau and the Patent Office which were funded by fees, not an annual appropriation from Congress.
The CFPB called the decision “a resounding victory for American families and honest businesses alike, ensuring that consumers are protected from predatory corporations and that markets are fair, transparent, and competitive…For years, lawbreaking companies and Wall Street lobbyists have been scheming to defund essential consumer protection enforcement.”
Its statement said that since bureau opened its doors in 2011, “it has delivered more than $20 billion in consumer relief to hundreds of millions of consumers and has handled more than 4 million consumer complaints.”
Thursday’s decision is the latest sign that the Supreme Court’s conservatives are not ready to rubber stamp far-right rulings from Trump-appointed judges in Texas and Louisiana.
On Wednesday, the justices set aside a decision by two Trump appointees in Louisiana which would have blocked the use of new state election map with two majority Black districts.
Still pending before the court is a conservative challenge to the availability of abortion medication. Since 2000, the Food and Drug Administration has said these pills are safe and effective for ending early pregnancies. But anti-abortion doctors went to Texas and won rulings that could strictly limit dispensing the pills.
The consumer protection bureau that was upheld Thursday was conceived by Sen. Elizabeth Warren (D-Mass.) when she was a law professor.
The bureau became the centerpiece of the 2010 Dodd-Frank overhaul of financial regulations following the collapse of the mortgage market.
Its mission was to protect borrowers and consumers from deceptive and unfair practices by banks and mortgage lenders.
But it has been steadily opposed by much of the lending industry and by many Republicans who say the agency has too much unchecked power.
Congressional Democrats who created the bureau tried to shield it from the politics of Washington but that led to problems in the courts.
Under the 2010 legislation, the bureau’s director could not be removed by the president for political reasons, and the bureau’s budget was off-limits to Congress’ annual process of appropriations. Instead, its funding comes from the Federal Reserve, which earns fees from lending. The bureau used $641 million of that money last year.
The Supreme Court’s conservatives had cast a skeptical eye on the bureau. Four years ago, the justices in a 5-4 decision rejected the independent status of the director and ruled that person could be removed by the president for any reason, including political differences.
The current dispute began as a challenge to a proposed regulation of payday lenders.
In ruling for the lenders, the three judges of the 5th Circuit, all appointees of President Trump, said it violated the Constitution to shield the bureau from an annual fight over its appropriation.
Judge Cory Wilson said the “bureau’s perpetual insulation from Congress’ appropriations power, including the express exemption from congressional review of its funding, renders it … no longer accountable to Congress and, ultimately, to the people.”
Politics
Socialism goes west as DSA-backed challenger ousts longtime Democrat
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Rep. Diana DeGette, D-Colo., a 30-year incumbent, lost to a Democratic Socialists of America (DSA)-backed challenger in a high-profile primary on Tuesday evening.
Melat Kiros, a 29-year-old socialist, defeated DeGette in a Democratic primary for a deep-blue House seat anchored in Denver, according to The Associated Press, scoring a major victory for the socialist left on Tuesday evening.
The DSA had been aiming to cast DeGette’s loss as evidence of its growing momentum after a slate of socialist candidates won Democratic primaries in New York City last week.
“Today, the East Coast, next week the Mountain West,” the DSA wrote in a social media post last week.
Rep. Diana DeGette speaks during a press conference outside the U.S. Capitol building in Washington, D.C., on Jan. 10, 2024. (Samuel Corum/Getty Images)
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If elected in November, Kiros, who was born in Ethiopia, will likely join the ranks of the far-left group known as the Squad and become one of a handful of the House chamber’s outspoken socialists.
The millennial challenger was endorsed by Sen. Bernie Sanders, I-Vt., Rep. Alexandria Ocasio-Cortez, D-N.Y., and the anti-incumbent leftist organization Justice Democrats. Controversial socialist streamer Hasan Piker, who has said Hamas is “a thousand times better” than Israel and praised the Chinese Communist Party, also backed Kiros’ insurgent primary run.
DeGette, a member of the Congressional Progressive Caucus who supports abolishing Immigration and Customs Enforcement (ICE), sought to win a 16th House term by flexing her leftist bona fides. She argued her seniority on an influential House committee would allow her to push for Medicare-for-All legislation — a longtime priority of the party’s far-left flank.
DeGette, who was endorsed by former CPC Chairwoman Pramila Jayapal, D-Wash., also spotlighted her experience as an impeachment manager during Trump’s second impeachment trial in 2021.
Though DeGette and Kiros shared few policy disagreements, they diverged sharply over Israel and antisemitism. Kiros also sharply criticized DeGette for accepting corporate PAC contributions.
Kiros, a PhD student and lawyer, was fired from a New York firm in 2023 after publishing an open letter, arguing that pro-Palestinian student protesters calling for the elimination of Israel were not antisemitic and appearing to defend Hamas.
Melat Kiros participated in a League of Women Voters Congressional District 1 candidate forum at Montview Presbyterian Church in Denver on May 28, 2026. (RJ Sangosti/MediaNews Group/The Denver Post)
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She has also described the Oct. 7, 2023, attacks against the Jewish state as the “inevitable consequence of apartheid” and declined to characterize the deadly firebombing of protesters in Boulder last year who were urging the release of hostages held by Hamas in Gaza as antisemitic.
“I don’t know what was in the heart of the perpetrator,” Kiros told Colorado’s 9News in a recent television interview. “All I know is that he went and attacked innocent people because of what they might have believed.”
A June 2025 bipartisan resolution condemning the attack as part of a “rise in ideologically motivated attacks on Jewish individuals” won every present lawmaker’s support, except for Reps. Rashida Tlaib, D-Mich., and Thomas Massie, R-Ky., who voted present.
Kiros has also suggested the United States deserved 9/11.
“Inevitable in the sense that we destabilized a lot of the Middle East that forced people to believe that another act of violence was the only response,” Kiros told 9News when asked if she thought the terror attack was “the inevitable consequence of American foreign policy.”
“And again, just like I said before, our responsibility is to get rid of those conditions that lead to violence in the first place,” Kiros continued.
DeGette argued that Kiros’ embrace of Piker and her comments about antisemitism and 9/11 were disqualifying.
“I’m shocked and disgusted that Kiros is doubling down on excusing terrorism and the murder of innocent people,” the 30-year incumbent wrote on Facebook earlier this month.
Streamer and creator Hasan Piker speaks at a press conference during day two of Web Summit Vancouver at the Vancouver Convention Centre in Vancouver, Canada, on May 13, 2026. (Sam Barnes/Web Summit via Sportsfile via Getty Images)
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Colorado’s 1st Congressional District is the most liberal seat in the state and voted for former Vice President Kamala Harris by 56 points in 2024.
The primary fight was further scrambled by University of Colorado Regent Wanda James, also running for DeGette’s seat. Though James did not pose the same threat as Kiros, her vote share could ultimately have swayed the contest.
Politics
Newsom signs off on 100% California tax for money from Trump’s $1.8-billion ‘slush fund’
Gov. Gavin Newsom has signed off on a 100% state tax on money any Californians receive from Trump’s $1.8-billion “anti-weaponization” fund for his political allies.
Newsom unveiled his proposal in May, after Trump’s Justice Department said it would create a fund to compensate Trump’s allies who claim they have “suffered weaponization and lawfare” under Biden’s Justice Department.
The settlement fund was criticized by politicians on both sides of the aisle, including Sen. Mitch McConnell (R-Ky.), who described it as a “slush fund to pay people who assault cops.”
The fund remains in legal limbo. Earlier this month, a federal judge in Virginia extended a court-ordered block on the plan, which critics warned could be used to pay pardoned Jan. 6 rioters.
Fast-tracked into law as part of Senate Bill 122, Newsom’s plan imposes “a tax on any settlement fund payment from the federal Anti-Weaponization Fund, or any subsequent fund, settlement, or agreement, as provided, at a rate of 100%,” according to the bill text. The tax applies to all tax years between 2026 and 2030.
Newsom signed the bill Tuesday. In a statement, his office said the tax is meant to ensure that, should Trump’s fund proceed, California recipients won’t “receive favorable state treatment on those payments.”
“We believe democracy is worth defending, the rule of law matters, and public dollars should support victims—not those who attacked the very institutions that protect our freedoms,” Newsom said in the statement.
University of Southern California law professor Ariel Jurow Kleiman, an expert on tax law and policy, said that while Newsom’s tax is a “novel legal strategy,” she believes there is “no categorical legal restriction” preventing California from implementing it.
States have a “wide degree of discretion” to design their tax systems — including how they define income — so long as they do not violate their constitutions, Jurow Kleiman said.
If a California resident wanted to challenge the tax in court, they would need to show they were harmed by it to have standing to sue, according to Jurow Kleiman. That would mean receiving a payment from Trump’s settlement fund and then paying the 100% California tax. Unless the settlement fund is established and distributes payments, that scenario is unlikely.
While there have been proposals to levy a 100% tax on income above certain thresholds — Sen. Bernie Sanders (I-Vt.) in 2023 said he supports a 100% tax on income exceeding $1 billion — Jurow Kleiman said she is not aware of any governments that have adopted such a policy.
Politics
Congress eyes rare bipartisan housing win with or without Trump’s help
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The House has officially shipped a colossal bipartisan housing package to President Donald Trump, and lawmakers are hoping that, at the very least, he doesn’t veto it.
Trump was supposed to sign the 21st Century ROAD to Housing Act last week, but his last-minute decision to ghost the signing ceremony with House Speaker Mike Johnson, R-La., and Senate Majority Leader John Thune, R-S.D., put into question whether the bill was dead.
His refusal to sign the bill, which passed with overwhelmingly bipartisan support in both chambers, was to leverage the Safeguarding American Voter Eligibility (SAVE) America Act, which doesn’t currently have the votes to succeed in the Senate.
WARREN TELLS TRUMP TO ‘SIGN THE DAMN BILL’ AS BIPARTISAN HOUSING PACKAGE REMAINS STALLED IN WASHINGTON
Trump has refused to sign the 21st Century ROAD to Housing Act. (Shawn Thew/EPA/Bloomberg via Getty Images)
Trump appears to be in no hurry to sign the bill, despite Republicans who are hungry for a win in the affordability fight ahead of the midterm elections.
“It’s so unimportant … compared to the SAVE America Act,” Trump told reporters in the Oval Office on Monday. “I think the SAVE America Act is exactly what it says. It’s saving America from crooked elections.”
“Here’s what I would like to sign, much more than a bill that — big deal, it’s a yawn,” he continued. “Some people say it’s wonderful. To me, compared to the SAVE America Act, just about everything is a big yawn.”
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It’s legislation that is loaded with nearly 60 provisions from both sides of the aisle in both chambers that’s designed to make it easier for homes to be built and for younger Americans to buy their first home. It also includes a ban on hedge funds buying up housing stock that Trump pushed Congress to include during the State of the Union earlier this year.
Sen. Elizabeth Warren, D-Mass., one of the architects behind the bill in the upper chamber alongside Sen. Tim Scott, R-S.C., charged that Congress handed the bill to Trump “on a silver platter.”
“When you ask me what happens next, if he cared about the American people, he’d have already signed the damned thing, and we’d be underway,” Warren said on WCVB’s “On the Record” on Sunday.
But Trump doesn’t have to put his signature on the bill for it to become law.
IRATE REPUBLICANS ACCUSE TRUMP OF HANDING DEMOCRATS A WIN AFTER BLOWING UP HOUSING PACKAGE
The Senate advanced a massive, Trump-backed housing package geared toward lowering the costs of homes and supercharging the housing supply. Sen. Elizabeth Warren, D-Mass., pitched it as legislation to prevent America from becoming a “nation of renters.” (Jemal Countess/Getty Images for Protect Borrowers; Anna Moneymaker/Getty Images)
The Constitution grants presidents the ability to veto a bill within 10 days of it being transferred over to the White House. In that scenario, Congress could override a veto of the housing package.
It’s happened before under the Trump administration. In early 2021, Congress overrode Trump’s veto of the annual National Defense Authorization Act — a massive Pentagon funding authorization package that some House Republicans are trying to use as a vehicle to pass the SAVE America Act.
But during that 10-day period, if Trump doesn’t sign the bill, it would automatically become law. That’s unless Congress completely adjourns, in which case a “pocket veto” could happen. The Senate is currently in recess and the House is scheduled to leave town by week’s end, but neither count as a full adjournment.
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Johnson, who spent the last few days meeting with Trump at the White House about the housing bill and the SAVE America Act, said: “I hope he does sign it.”
“If he doesn’t, it’s still law,” Johnson said. “We’ll still celebrate it, but he’s trying to make a point, and I think he’s making it very effectively. And the fact that you all ask me every three steps down the hallway illustrates that he has achieved the desired objective, and that is to make SAVE America the number one thing, because if we don’t get that right, everybody’s concerned about what happens next.”
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