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Supreme Court rejects payday lenders' challenge to Obama-era consumer protection bureau

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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.

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“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.”

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“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.”

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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.

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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.

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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.”

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Video: U.S. ‘Accelerating’ Military Assault in Iran, Hegseth Says

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Video: U.S. ‘Accelerating’ Military Assault in Iran, Hegseth Says

new video loaded: U.S. ‘Accelerating’ Military Assault in Iran, Hegseth Says

On the fifth day of the war in Iran, Defense Secretary Pete Hegseth said that the U.S. military operation was intensifying and that more warplanes were arriving in the region.

By Christina Kelso

March 4, 2026

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US submarine sinks Iranian warship by torpedo in a first since World War II

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US submarine sinks Iranian warship by torpedo in a first since World War II

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A U.S. submarine sank a prized Iranian warship by torpedo, the first such sinking of an enemy ship since World War II, Secretary of War Pete Hegseth said Wednesday morning.

Hegseth joined Chairman of the Joint Chiefs of Staff Gen. Dan Caine at the Pentagon to provide an update to reporters on “Operation Epic Fury” in Iran.

“An American submarine sunk an Iranian warship that thought it was safe in international waters,” Hegseth said. “Instead, it was sunk by a torpedo. Quiet death. The first sinking of an enemy ship by a torpedo since World War Two. Like in that war, back when we were still the War Department. We are fighting to win.”

Caine said that an Iranian vessel was “effectively neutralized” in a Navy “fast attack” using a single Mark 48 torpedo. He added that the U.S. Navy achieved “immediate effect, sending the warship to the bottom of the sea.”

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WATCH HEGSETH’S ANNOUNCEMENT:

Hegseth said that the U.S. Navy sank the Iranian warship, the Soleimani. The flagship was named for Qasem Soleimani, an Iranian military officer who served in the Islamic Revolutionary Guard Corps who the U.S. killed in a January 2020 drone strike during President Donald Trump’s first term.

“The Iranian Navy rests at the bottom of the Persian Gulf. Combat ineffective, decimated, destroyed, defeated. Pick your adjective,” Hegseth said. “In fact, last night we sunk their prize ship, the Soleimani. Looks like POTUS got him twice. Their navy, not a factor. Pick your adjective. It is no more.”

This map shows U.S. and Israeli strikes against Iranian naval forces as of March 1. (Fox News)

Hegseth also told reporters at the briefing that the U.S. and Israel will soon achieve “complete control” over Iranian airspace after Iran’s missile capabilities were drastically diminished in the four days of fighting.

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US ‘WINNING DECISIVELY’ AGAINST IRAN, WILL ACHIEVE ‘COMPLETE CONTROL’ OF AIRSPACE WITHIN DAYS, HEGSETH SAYS

“More bombers and more fighters are arriving just today and now, with complete control of the skies, we will be using 500 pound, one thousand pound and 2,000 pound laser-guided precision gravity bombs, of which we have a nearly unlimited stockpile,” he said.

The war has killed more than 1,000 people in Iran and dozens in Lebanon, while U.S. officials said six American troops were killed in a fatal drone strike in Kuwait.

Thousands of travelers have been left stranded across the Middle East.

This map shows security and travel updates for Americans regarding countries in the Middle East region. (Fox News)

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Caine told reporters that the U.S. military is helping thousands of Americans stranded in the Middle East after the U.S. State Department urged citizens to leave more than a dozen countries.

Fox News Digital’s Ashley Carnahan contributed to this report.

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Sen. Padilla preps for Trump trying to seize control of elections via emergency order

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Sen. Padilla preps for Trump trying to seize control of elections via emergency order

Sen. Alex Padilla (D-Calif.) is preparing for President Trump to declare a national emergency in order to seize control of this year’s midterm elections from the states, including by bracing his Senate colleagues for a vote in which they would be forced to either co-sign on the power grab or resist it.

In the wake of reporting last week that conservative activists with connections to the White House were circulating such an order, Padilla sent a letter to his Senate colleagues Friday stating that any such order would be “wildly illegal and unconstitutional,” and would no doubt face “extremely strict scrutiny” in the courts.

“Nevertheless, if the President does escalate his unprecedented assault on our democracy by declaring an election-related emergency, I will swiftly introduce a privileged resolution [and] force a vote in the Senate to terminate the fake emergency,” wrote Padilla, the ranking Democrat on the Senate Committee on Rules and Administration.

Padilla wrote that such an order — which could possibly “include banning mail-in voting, eliminating major voting registration methods, voter purges, and/or new document barriers for registering to vote and voting” — would clearly go beyond Trump’s authority.

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“Put simply, no President has the power under the Constitution or any law to take over elections, and no declaration or order can create one out of thin air,” Padilla wrote.

The same day Padilla sent his letter, Trump was asked whether he was considering declaring a national emergency around the midterms. “Who told you that?” he asked — before saying he was not considering such an order.

The White House referred The Times to that exchange when asked Tuesday for comment on Padilla’s letter.

If Trump did declare such an emergency, a “privileged resolution,” as Padilla proposed, would require the full Senate to vote on the record on whether or not to terminate it — forcing any Senate allies of the president to own the policy politically, along with him.

Experts say there is no evidence that U.S. elections are significantly affected or swung by widespread fraud or foreign interference, despite robust efforts by Trump and his allies for years to find it.

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Nonetheless, Trump has been emphatic that such fraud is occurring, particularly in blue states such as California that allow for mail-in ballots and do not have strict voter ID laws. He and others in his administration have asserted, again without evidence, that large numbers of noncitizen residents are casting votes and that others are “harvesting” ballots out of the mail and filling them out in bulk.

Soon after taking office, Trump issued an executive order purporting to require voters to show proof of U.S. citizenship before registering and barring the counting of mail-in ballots received after election day, but it was largely blocked by the courts.

Trump’s loyalist Justice Department sued red and blue states across the country for their full voter rolls, but those efforts also have largely been blocked, including in California. The FBI also raided an elections office in Georgia that has been the focus of Trump’s baseless claims that the 2020 presidential election was stolen from him.

Trump is also pushing for the passage of the SAVE Act, a voter ID bill passed by the House, but it has stalled in the Senate.

In recent weeks, Trump has expressed frustration that his demands around voting security have not translated into changes in blue state policies ahead of the upcoming midterm elections, where his shrinking approval could translate into major gains for Democrats.

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Last month, Trump wrote on his Truth Social platform, “I have searched the depths of Legal Arguments not yet articulated or vetted on this subject, and will be presenting an irrefutable one in the very near future. There will be Voter I.D. for the Midterm Elections, whether approved by Congress or not!”

Then, last week, the Washington Post reported that a draft executive order being circulated by activists with ties to Trump suggests that unproven claims of Chinese interference in the 2020 election could be used as a pretext to declare an elections emergency granting Trump sweeping authority to unilaterally institute the changes he wants to see in state-run elections.

Election experts said the Constitution is clear that states control and run elections, not with the executive branch.

Democrats have widely denounced any federal takeover of elections by Trump. And some Republicans have expressed similar concerns, including Sen. Mitch McConnell (R-Ky.), who chairs the Senate rules committee.

In the Wall Street Journal last year, McConnell warned against Trump or any Republican president asserting sweeping authority to control elections, in part because Democrats would then be empowered to claim similar authority if and when they retake power.

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McConnell’s office referred The Times to that Journal opinion piece when asked about the circulating emergency order and Padilla’s resolution.

Padilla’s office said his resolution would be introduced in response to an emergency declaration by Trump, but hoped it wouldn’t be necessary.

“Instead of trying to evade accountability at the ballot box,” Padilla wrote, “the President should focus on the needs of Americans struggling to pay for groceries, health care, housing and other everyday needs and put these illegal and unconstitutional election orders in the trash can where they belong.”

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