The CFPB’s Funding Crisis: Legal, Operational, and Policy Implications

In a stunning development, on December 10, 2025, Acting CFPB Director Russ Vought informed the U.S. District Court for the District of Columbia (Judge Amy Berman Jackson) that the Consumer Financial Protection Bureau (CFPB) will exhaust its funds by year-end unless Congress provides a direct appropriation.

Earlier this year, Judge Jackson had issued an injunction which, among other things, precludes the CFPB from reducing the staff of the CFPB by about 1,400 employees and taking certain other actions aimed at preventing the CFPB from shutting down. While the injunction had been vacated by a 3-judge panel of the D.C. Court of Appeals, that panel has stayed issuing its mandate since the plaintiffs are still waiting for the Court of Appeals to act on their petition for hearing en banc. As a result, Judge Jackson's injunction remains in effect.

In the filing made before Judge Jackson, the Bureau disclosed that:

1. The Department of Justice’s Office of Legal Counsel (OLC) recently concluded that the CFPB cannot lawfully request additional funds from the Federal Reserve because the Fed has reported combined losses since September 2022.

2. The OLC further found that such a request would violate the Anti-Deficiency Act (ADA), which prohibits federal spending not authorized by Congress.

3. The CFPB believes the ADA overrides the District Court’s preliminary injunction, which currently blocks mass termination of employees and cost-cutting.

4. The Bureau intends to seek direct Congressional appropriations, though approval remains uncertain.

Meanwhile, as stated above, the CFPB still faces ongoing litigation over the injunction, and its ambitious regulatory agenda - including initiatives under Sections 1033 (open banking) and 1071 (small business data collection), as well as a new ECOA rulemaking - hangs in the balance if funding lapses.

Our expert panel will analyze the legal, operational, and policy ramifications of this unprecedented situation, including:

• The validity of the CFPB’s and OLC’s interpretations of the Dodd-Frank funding provisions.

• Whether the Bureau’s funding deficiency argument is waived due to its late emergence and arguably inconsistent actions or non-actions.

• The status of CFPB actions and regulations issued while the Fed was operating at a loss.

• The potential impact on existing and future rulemakings if funding lapses.

• Operational and other consequences for financial institutions and regulators in the event of a CFPB shutdown.

• Possible Congressional or judicial resolutions, including whether this crisis could prompt legislation placing the CFPB under the regular appropriations process.

This program will provide critical insights for financial institutions, compliance professionals, in-house counsel, and policymakers navigating the far-reaching implications of the CFPB’s funding crisis - both for near-term compliance and the long-term structure of consumer financial protection.

We will be joined by the following special guests:

• Alex J. Pollock, Senior Fellow, Mises Institute; Former Principal Deputy Director, Office of Financial Research, U.S. Treasury
• Hal S. Scott, Professor Emeritus, Harvard Law School; Director, Committee on Capital Markets Regulation

ADDITIONAL INFORMATION

This program is approved for 1.5 CLE credits in CA, NV, NY, & PA; and 1.8 NJ. Uniform Certificates of Attendance will also be provided for the purpose of seeking credit in other jurisdictions.

11:45 AM - 12:00 PM | Log in
12:00 PM - 1:30 PM | Program

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