Court rules against administration’s attempt to withhold CFPB funding

A federal judge ruled this week that the CFPB can continue to receive funds from the Federal Reserve, contradicting the administration’s legal argument that the Fed cannot fund the bureau. 

The Department of Justice’s (DOJ) Office of Legal Counsel released an opinion in November noting that, since the Federal Reserve is operating at a loss, it could not fund the CFPB, and any additional funds for the bureau would need to be appropriated by Congress. The administration said, following that opinion, it expected the CFPB to run out of funds in early 2026, and subsequently announced plans to transfer enforcement actions to the DOJ.

The U.S. District Court for D.C. ruled that Office of Management and Budget (OMB) Director Russell Vought cannot unilaterally decide not to request funds for the CFPB.

America’s Credit Unions reached out to the administration, OMB, and CFPB in response to the decision not to request funds, going as far back as July 2025 when Vought indicated no funding draws from the Fed would be necessary in the latter half of the year.

The organization also raised specific concerns with the CFPB issuing an interim final rule for its personal financial data rights rule due to the reduced funding in 2026, noting that one of the bureau’s most technical and complex rules should go through a standard rulemaking process.

America’s Credit Unions and its members continue to support reforms to the CFPB’s structure and funding process, emphasizing the importance of congressional oversight and greater accountability.