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Justice Department Says CFPB Can’t Tap Fed Funds, Warns of Early-2026 Cash Exhaustion

A new DOJ legal opinion ties CFPB transfers to nonexistent Federal Reserve profits, pushing the agency toward a 2026 funding cliff.

Overview

  • The Office of Legal Counsel concluded the Federal Reserve currently has no “combined earnings,” so the CFPB cannot legally request transfers under Dodd-Frank.
  • In a court notice, Justice Department attorneys said the bureau anticipates exhausting available funds in early 2026 and flagged a potential lapse governed by the Antideficiency Act.
  • The filing states Acting Director Russell Vought will prepare a report on funding needs for the president and congressional appropriators as prospects for a 2026 appropriation remain uncertain.
  • The CFPB said it has sufficient resources to operate at least through Dec. 31, 2025, while litigation over workforce cuts and agency operations proceeds in the D.C. Circuit.
  • Several judges and Texas’s attorney general have rejected the surplus-only theory and the Supreme Court upheld the funding structure in 2024, even as opponents seek to shrink an agency that reports $21 billion returned to consumers.