The U.S. Supreme Court on Thursday upheld the Consumer Financial Protection Bureau's funding mechanism in a challenge brought by the payday loan industry, handing a victory to President Joe Biden's administration and a setback to the agency's conservative critics.

The 7-2 decision, authored by conservative Justice Clarence Thomas, reversed a lower court's ruling that the CFPB's funding design violated a provision of the U.S. Constitution called the "appropriations clause" giving Congress the power of the purse. The agency draws money annually from the Federal Reserve instead of from budgets passed by lawmakers.

Biden called the decision "an unmistakable win for American consumers," touting how the agency under his administration has provided nearly $9 billion in consumer relief and is working to save Americans $20 billion annually going forward on credit card late fees, overdraft fees and other "junk fees."

"In the face of years of attacks from extreme Republicans and special interests, the court made clear that the CFPB's funding authority is constitutional and that its strong record of consumer protection will not be undone," Biden said in a statement.