Democrats on the Senate Banking, Housing and Urban Affairs Committee are accusing Acting CFPB Director Russell Vought of trying to shut down the CFPB by starving it of funding.
“You have…let the fiscal year pass without having requested any funding for the CFPB to perform its work, an unprecedented approach that threatens to leave the agency unable to fulfill its many statutory obligations on behalf of consumers across the country,” the Democrats, led by ranking Democratic Sen. Elizabeth Warren, D-Mass., said in a letter to Vought.
Under Section 1017 of Dodd-Frank, the CFPB is funded through quarterly transfers from the combined “earnings” of the Federal Reserve system. The One Big Beautiful Bill Act reduced the maximum amount that the CFPB can receive in a fiscal year from 12.5% to 6.5% of the Federal Reserve’s inflation-adjusted operating expenses for 2009.
With the reduction, the maximum amount for fiscal 2025 would be $446 million. However, critics have asserted that “earnings” means profits, that the Federal Reserve system currently has no earnings and has not had any earnings since it has been operating at a loss since September 2022, and accordingly that the Bureau cannot be funded. See here, here, and here
The Democratic Senators also questioned Vought’s reported recent comments on the “Charlie Kirk Show.” According to several press reports, Vought said that he thinks he will be successful in shutting down the CFPB within the next two or three months.
“Those comments are particularly concerning given that a federal court has specifically blocked you from illegally shutting down the agency,” the Democrats wrote.
The National Treasury Employees Union has filed suit, arguing that the firing of more than 1,400 CFPB employees amounts to a shutdown of the agency.
The U.S. Circuit Court of Appeals for the District of Columbia has said that the Trump Administration officials may resume the firings, but it withheld the mandate in the case. The union subsequently filed a request for an en banc hearing.
The Democratic Senators told Vought that while Administration officials have said in the litigation that there is no plan to close the bureau, his “brazen admission” makes it clear that the goal is to shut down the CFPB.
And they asked Vought to respond by October 31 to the following specific questions:
- What is the current unobligated balance of the Consumer Financial Protection Bureau Fund? Without additional funding, on what date will the Bureau run out of funding at its current spending rate?
- What is the current unobligated balance of the Consumer Financial Protection Bureau’s Civil Penalty Fund?
- Despite a federal court order barring you from shutting down the CFPB, you confirmed that you still plan to try to close the agency in two or three months. Has the agency prepared specific plans for reductions in force, for terminating contracts, for reducing enforcement actions, or for winding down other work in that timeframe? Please provide copies of any relevant memoranda.
Whether and how Vought will respond remains to be seen.
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