Former Fed Officials Say CFPB’s Vought Must Ask For Funding

Former Federal Reserve officials are urging a federal court to rule that Acting CFPB Director Russell Vought is legally required to request funding for the Consumer Financial Protection Bureau from the Federal Reserve, despite a Justice Department opinion saying he cannot.​

What the former Fed officials argue

Five former Federal Reserve officials filed a brief in the U.S. District Court for the District of Columbia supporting the National Treasury Employees Union’s effort to force Vought to seek funds to keep the CFPB operating. They contend that the Justice Department Office of Legal Counsel’s view—that the Fed has no “combined earnings” and thus cannot fund the CFPB—is factually wrong because the Federal Reserve System continues to generate income and can lawfully transfer money to the bureau under Dodd‑Frank.​

Vought’s position and the OLC opinion

Vought has told the court and Congress that, based on the OLC’s interpretation, the CFPB cannot legally draw further funds from the Federal Reserve because the Fed is currently operating at an overall loss and therefore has no profits to transfer. On that basis, he has refused to submit the normal funding request to the Fed and instead has said the bureau will seek a separate appropriation from Congress while warning that existing CFPB funds will run out in early 2026.​

Why funding matters now

The CFPB is normally funded outside the annual appropriations process, via transfers from the Federal Reserve up to a statutory cap, and it relies on those transfers to carry out its consumer‑protection mandates. If Vought does not request funds and no court or congressional action intervenes, the bureau is projected to exhaust its remaining balances early next year, potentially forcing it to halt most operations.​

Former Fed officials argued that Russell Vought is legally obligated to request CFPB funding from the Federal Reserve and that the DOJ Office of Legal Counsel (OLC) opinion he relies on is built on a wrong understanding of how the Fed’s finances work.​

Challenge to the OLC opinion

The former officials told the court that the OLC’s conclusion that the Fed lacks “combined earnings” to fund the CFPB is factually incorrect because the Federal Reserve System is currently generating positive earnings once its operations are properly understood. They argued that the OLC treated the Fed like a profit‑maximizing private firm, even though the Fed’s own accounting and financial statements do not use “profit” or the specific measure of earnings the OLC applied.​

How Fed operations support funding

They explained that the 12 regional Federal Reserve Banks earn substantial income from services and interest on securities, and that “necessary expenses” out of that income explicitly include transfers to the CFPB. Even though the Fed has been recording a deferred asset instead of remitting money to Treasury, they pointed to recent balance sheet data showing net earnings now exceed expenses, meaning there are positive “combined earnings” under any definition, including the one the OLC used.​

Argument that Vought must request funds

Because the Fed has earnings and statutory authority to transfer funds, the former officials contend Vought has a legal duty—under Dodd‑Frank’s funding mechanism—to submit a funding request and lacks authority to decline to do so as a matter of policy or discretion. Their brief supports the union’s claim that refusing to request funds violates a court order protecting CFPB operations and is inconsistent with the structure Congress created to insulate the bureau from annual appropriations.​