Trump Officials Face More Pushback On CFPB Funding Argument

Trump officials are facing growing legal and public backlash against their claim that the Consumer Financial Protection Bureau (CFPB) cannot be funded because the Federal Reserve currently has no “profits.” Nonprofits, unions, former Federal Reserve officials, and several judges argue that this reading of the Dodd‑Frank Act is novel, legally weak, and designed to choke off the agency’s operations without going through Congress.​

What the Trump team argues

The Justice Department’s Office of Legal Counsel recently issued an opinion saying the CFPB can only draw money from the Federal Reserve’s “combined earnings,” which it now interprets to mean profits, so the Fed’s current losses supposedly prevent any transfers. Acting CFPB Director Russell Vought has also declined to request new funds from the Fed, helping create a projected cash shortfall that could force the CFPB to shut down in early 2026 unless Congress steps in.​

Why pushback is increasing

Consumer-protection nonprofits and former Fed officials have filed briefs and public statements rejecting the “no profits, no funding” theory, saying the Fed still has substantial earnings and that nothing in Dodd‑Frank or past practice supports this narrow definition of “earnings.” They argue the administration’s stance is a backdoor attempt to dismantle an agency that the Supreme Court has already said is constitutionally funded through the Federal Reserve instead of annual appropriations.​

Role of courts and unions

Several federal judges have previously rejected similar arguments when companies tried to get CFPB enforcement cases thrown out on the ground that the bureau could only be funded from Fed profits. A federal employees’ union has now asked a judge to order Trump officials to seek and provide funding for the CFPB, saying the new interpretation contradicts the statute, past practice, and the Supreme Court’s recent approval of the CFPB’s funding structure.​​

Broader stakes for consumers

Critics warn that if the administration’s position prevails and the CFPB runs out of money, many core protections for borrowers, credit card users, and other consumers would disappear or weaken sharply. Supporters of the bureau frame the funding fight as part of a broader push by President Trump to curb or shut down independent regulators that police powerful financial interests.​​