Questions Abound Over CFPB‘s Future

In a recent court filing, the Consumer Financial Protection Bureau (CFPB) asserts that its current available funding will be exhausted by early 2026. The filing goes on to state that in the opinion of the Office of Legal Counsel (US Department of Justice), the agency lacks the ability to draw additional funds from the Federal Reserve for its operations going forward.

Section 1017 of the Dodd-Frank Act provides that the CFPB is funded through transfers requested from the combined earnings of the Federal Reserve System. However, the Federal Reserve has been operating at a loss since September 2022. The filing argues that with no combined earnings, the Federal Reserve is unable to provide funds to the CFPB to continue its operations.

Acting Director Russell Vought plans to submit a report to President Trump and congressional appropriations committees outlining the funding needs of the agency on a go forward basis. However, the filing states, “the Bureau does not know whether and the extent to which Congress will appropriate funding” and reminds the court that under the Antideficiency Act, federal agencies are prohibited from conducting any business during a lapse in appropriations.

This appears to be the opening salvo in what promises to be a heavily litigated battle over the future of the CFPB. The court filing follows Vought’s comments about the CFPB during his appearance on The Charlie Kirk Show on October 15. During that radio program, Vought said that only a handful of employees remain at the CFPB’s headquarters “while we close down the agency,” which he went on to say should be with in two to three months.