The Consumer Financial Protection Bureau may run out of money to operate in early 2026 after the Department of Justice’s Office of Legal Counsel determined the agency cannot request funds from the Federal Reserve. 

The CFPB under the 2010 Dodd-Frank Act is authorized to use money from the “combined earnings of the Federal Reserve System.” However, the Fed has not been profitable since 2022. 

In a Nov. 7 memorandum to the CFPB, the DOJ ruled that “the combined earnings of the Federal Reserve System” refers to Fed profits, therefore there is no money to transfer to the CFPB, according to court documents. 

CFPB Acting Director Russell Vought must request additional funds from Congress under its Appropriations Clause, according to the DOJ memorandum. 

The bureau on Nov. 10 filed a notice with the U.S. District Court for the District of Columbia informing the court that it has enough money to operate through Dec. 31.  

It is not yet clear whether Congress will approve additional funding for the bureau, but recent actions show a significant pullback in the CFPB’s authority. 

“Even though the CFPB is technically ‘open for business,’ it is essentially already ‘shut down’ in the sense that it is not doing any real supervision or enforcement work,” Alan Kaplinsky, senior counsel and former practice group leader of the Consumer Financial Services Group at law firm Ballard Spahr, told FinAi News.  

What this means for consumer protections

The CFPB has seen significant changes since President Donald Trump took office in January. 

Agency actions over the past year include: 

• The bureau withdrew in May from more than 60 regulatory documents spanning policy statements, rules, guidance and advisory opinions; 

• The bureau moved to withdraw its open banking rule in May; and 

• The CFPB let more than 1,400 employees go in April. 

“The actions already taken by acting Director Vought have emasculated the CFPB, and it is not engaged in any real consumer protection in any of the industries over which it has jurisdiction, let alone in situations involving the use of AI,” Kaplinsky said, noting that the Trump administration has stated that innovation is more important than regulation, pointing to the White House AI Action Plan. 

“That leaves a handful of state attorneys general and other state enforcement agencies as the only potential source of consumer protection, and they simply don’t have the resources to do an adequate job in enforcing consumer protection laws in the fintech industry,” Kaplinsky said. 

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