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On November 11, 2025, the Department of Justice intervened in the Consumer Financial Protection Bureau’s dispute with its employee union and notified the D.C. Circuit that the Bureau’s funding structure was unconstitutional and it can no longer draw funds from the Federal Reserve to fund its operations. The filing cited a formal opinion from the Department of Justice’s Office of Legal Counsel concluding that the Federal Reserve currently lacks “combined earnings” from which the Bureau may lawfully obtain funding. Previously, the Bureau stated that it could draw funds from the Federal Reserve’s revenues, but now maintains that only profits, not revenues, qualify as “combined earnings” under the Dodd-Frank Act. Because the Federal Reserve has been operating at a loss since 2022, there are currently no profits available for transfer to the CFPB. The OLC opinion states that the only way for the CFPB to keep the lights on is to request appropriations from Congress.
While the administration looks to wind down the CFPB, the White House announced today that Stuart Levenbach was nominated to be the Director of the CFPB. Levenbach is a senior official in the Office of Management and Budget. According to news reports, the CFPB stated that the nomination was a “technical” maneuver to extend Acting Director Russ Vought’s ability to continue serving as the head of the agency without Senate confirmation. Under the Vacancies Act, acting appointments are good for only 210 days but can be extended if the president nominates another person for the job.
Putting It Into Practice: This year has already seen the CFPB significantly reduce its overall activity (previously discussed here, here, and here), and its acknowledgement that it cannot lawfully draw additional funds from the Federal Reserve signals a deeper level of operational uncertainty heading into 2026. The prospect of exhausting available funds and relying on potential congressional appropriations represents a major shift in how the agency may resource its remaining supervisory and policy work. Financial institutions should monitor the Bureau’s public updates closely and consider how continued funding related constraints may influence examination timelines, policy priorities, and long term compliance planning.
