Congress, Not Fed, Must Fund CFPB
Posted: Nov 12 2025
The CFPB will exhaust its currently available funding early next year, and the bureau cannot withdraw funds from the Federal Reserve without a congressional appropriation, according to a recent memo by the U.S. Department of Justice’s Office of Legal Counsel.
The CFPB is unique among federal agencies in that its funding comes directly from the Fed based on a request from the bureau’s director. Earlier this year, CFPB acting Director Russell Vought announced plans for a reduction in force affecting a large number of bureau employees and announced he would not ask the Fed for the agency’s next appropriation. In response, the union representing CFPB employees filed a lawsuit in federal court alleging the Trump administration is illegally seeking to shut down the bureau.
The Trump administration argues that the CFPB can only withdraw funds from the Fed if the latter makes a profit, although the bureau’s defenders counter that the administration is misinterpreting the law. The DOJ upheld the administration’s interpretation in the memo filed as part of the lawsuit, saying that because the Fed is not profitable, it cannot transfer money to the CFPB. The bureau’s only recourse is Congress, according to the memo.
“Because the only lawful source of funding from the Federal Reserve has dried up, the proper method for obtaining additional funds is to request them from Congress pursuant to the Appropriations Clause, not to draw funds from the Federal Reserve without a congressional appropriation,” the DOJ said.