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Russ Vought’s CFPB has been busier over the past two weeks, but not because of increased enforcement or supervision efforts. Instead, recent actions indicate that the administration intends to keep Vought in the acting director position so he can shutter or even more substantially shrink the CFPB and the laws it enforces. But the CFPB’s employee group, union, and others are not going down without a fight, as they vigorously oppose Vought’s efforts in court. Whether and the extent to which Vought ultimately can achieve his goals is likely to make its way to the Supreme Court and, therefore, remains to be seen. Regardless, state attorneys general and other agencies, nonprofits, and plaintiffs’ firms, joined by many recent CFPB alumni, will attempt to fill any gap left by the CFPB’s lack of enforcement.
Lapse of Appropriations Fight
On November 10, 2025, Vought filed notices in federal district and appellate court litigation with the CFPB’s employees saying the CFPB anticipates that it will run out of money in early 2026 and that he does not believe it can legally request more money from the Federal Reserve based on the Bureau’s funding structure. Despite its own lawyers and the Texas attorney general arguing successfully in enforcement proceedings that the CFPB can draw funds from the Federal Reserve’s “revenues,” Vought notified the Department of Justice’s (DOJ) Office of Legal Counsel (OLC) “that, upon further consideration, the CFPB now takes a different view from the one it held in 2024. The CFPB now believes its source of funding – the combined earnings of the Federal Reserve [System under 12 U.S.C. § 5497] – has been exhausted” (see Nat’l Treas. Empl. Union v. Vought, Case No. 1:25-cv-00381-ABJ (D. D.C.), at Doc. 145-1 at 8 (link here)).
Vought asked the OLC to opine, and it agreed with him. First, the OLC found it unpersuasive that the courts that have considered the “surplus funding” arguments advanced by Vought uniformly rejected or refused the dismiss cases based on them(see CFPB v. Active Network, LLC, No. 22-0898 (E.D. Tex. Oct. 7, 2024), Memorandum Op. & Ord. at 3 (denying the motion in a single sentence); CFPB v. Solo Funds, No. 24-cv-04108, 2024 WL 4553110 at *2 (C.D. Cal. Oct. 17, 2024) (declining to dismiss the case on the basis of defendant’s surplus funding argument); Texas v. Colony Ridge, Inc., No. H-24-00941, 2024 WL 4553111, at *4 (S.D. Tex. Oc. 11, 2024) (noting the Supreme Court upheld the constitutionality of CFPB’s funding mechanism in 2024, a time when the Federal Reserve was not operating at a surplus)).
Next, the OLC determined “combined earnings” do not mean revenues – as the CFPB previously had argued – and instead must mean surplus funding. The OLC rejected CFPB’s prior positions that “revenues” is consistent with the entire statute and legislative history, and that any other interpretation would be untenable, e.g., how profits are determined – weekly, monthly, quarterly.
As a result, Vought determined the CFPB would run out of money by early 2026 and that he cannot request additional funds from the Federal Reserve. He stated he would provide a report to President Trump and the Senate and House Appropriations committees under 12 U.S.C. § 5497(e)(1)(B) and request a separate appropriation of funds from Congress, which he did (discussed below).
The CFPB’s employee group, union, and others have challenged Vought’s funding position. Late on November 23, 2025 (a Sunday), they filed a motion to clarify, asking the federal court to clarify “that the defendants may not justify a violation of the preliminary injunction [preventing mass layoffs] by refusing to request [] funding.” A copy of the brief in support of the motion is here.
Substantial Revisions to ECOA and Regulation B
Just days after notifying the federal court that it is running out of money, as we discussed here, the CFPB issued a Notice of Proposed Rulemaking to propose substantial amendments narrowing the scope and reach of Regulation B, the Equal Credit Opportunity Act’s implementing regulation. As noted, comments to the proposed rule are due December 15, 2025, and, if pursued through a final rulemaking, would not take effect until sometime during the first quarter of 2026 at the earliest – after Vought says the CFPB is scheduled to run out of money.
Nomination of Stuart Levenbach for CFPB Director
On November 18, 2025, President Trump nominated Stuart Levenbach to serve as the CFPB’s director. But many believe this nomination is simply a placeholder for Vought to remain as the CFPB’s acting director. Levenbach currently serves in an associate director role at the Office of Management and Budget (OMB) with Vought. According to LinkedIn, Levenbach’s background is in kelp farming and natural resources. And while it is not unprecedented for someone with little or no consumer financial law experience to lead the CFPB, reports indicate administration officials have said the nomination was a technical move to allow Vought to stay as the CFPB’s acting director. Under the Federal Vacancies Reform Act, Vought is able to serve in the acting role for 210 days from when prior nominee Jonathan McKernan was formally withdrawn from consideration – until December 8, 2025 – or while a second nomination is pending in the Senate. If Levenbach’s nomination fails or is withdrawn, Vought would be entitled to serve as the CFPB’s acting director for another 210 days from whenever the second nomination is rejected or withdrawn. As such, Levenbach’s nomination will allow Vought to continue in the acting director role.
Transfer of Remaining Active Litigation Matters to DOJ
According to widespread news reports, on November 20, 2025, the Enforcement Division’s non-political leadership held an all-enforcement meeting to inform staff that the handful of remaining active litigation matters – down significantly from 30+ litigation matters pending in January 2025 – will be transferred to DOJ, presumably to its newly created Enforcement and Affirmative Litigation Branch (described here). Coupled with Vought’s November 10 announcement about funding, it seems the writing is on the wall: Vought’s CFPB Enforcement Division will look wildly different than enforcement divisions of the past, to the extent it continues to exist at all.
What Will Vought’s CFPB Look Like?
It’s unclear. According to November 21, 2025 Notices filed by Vought in the appellate court (link here), Vought submitted reports pursuant to 12 U.S.C. § 5497(e)(1)(B) to President Trump and Senate and House Appropriations committees. That provision of the Consumer Financial Protection Act specifies that, if the CFPB’s director ever determines that the amount the CFPB can obtain through the typical funding mechanism through the Federal Reserve’s “combined earnings” is going to be insufficient for the CFPB to carry out its required functions, the CFPB’s director must submit a report to the president and Congress specifying the amount of additional funds the director believes the CFPB will need for the upcoming year.
In his reports, Vought reiterated his conclusion that the CFPB does not have funds sufficient to carry out the authorities of the Bureau for 2026, and that OLC determined there are no funds legally available to request from the Federal Reserve. Interestingly, he estimates the CFPB’s “funding need” for 2026 is $279,566,358.82, but makes “clear[] this figure is provided solely to make the statutorily required report setting out the ‘funding needs’ of the Bureau if the funding mechanism at § 5497(a) is insufficient.” It is anyone’s guess whether or how Vought’s CFPB would use those funds even if Congress appropriates them.
What Does This Mean?
It’s impossible to know, for sure, how or whether the CFPB will emerge from its current existential crisis, but we will continue to follow.
- Will a leaner CFPB persist that focuses more on supervision and other non-enforcement functions? Late last week the CFPB announced that examiners will be required to read this “Humility Pledge” at the beginning of examinations starting in 2026, which could suggest some functions of CFPB will continue to exist – though they will look very different from past examinations.
- If Vought “right-sizes” the CFPB instead of eliminating it, who will be charged with leading the agency? Will it be Levenbach or someone else?
- Will the pendulum swing back and, if so, when? Keep in mind that the statutes of limitations for many of the laws CFPB enforces only begin to run “after the date of discovery of the violation to which an action relates” (12 U.S.C. § 5564(g)). For claims for unfair, deceptive, or abusive acts or practices under the Consumer Financial Protection Act (UDAAPs), for example, the CFPB has three years from the date of discovery of the violation to assert claims.
- If the DOJ is handling enforcement actions, can it bring claims for UDAAPs? Or does the CFPB have exclusive jurisdiction over claims asserting UDAAPs? Are there other laws only the CFPB can enforce?
- Will the DOJ be authorized to open new investigations or to bring new enforcement actions? If so, will they?
- Can the DOJ issue civil investigative demands authorized under the Consumer Financial Protection Act?
- Will state attorneys general, state agencies, plaintiffs’ firms, and nonprofits increase their enforcement efforts? We know former CFPB employees, including Enforcement Division attorneys and investigators, already have transitioned to other roles across the country to continue to pursue consumer rights litigation.
- How can companies prepare for a scattershot of investigations and enforcement actions if the CFPB is no longer taking the lead? And is that better for business?
In any event, if Mark Twain was correct that “history doesn’t repeat itself, but it often rhymes,” providers of consumer financial products and services are well advised to use any slowdown in enforcement actions to focus on compliance.
