In her December 30, 2025 opinion in National Treasury Employees Union v. Vought (which we blogged about here), Judge Amy Berman Jackson concluded that the CFPB may continue to draw funding from the Federal Reserve System even when the Federal Reserve, on a combined basis, is losing money. According to the court, the statutory phrase “combined earnings of the Federal Reserve System” in 12 U.S.C. § 5497(a)(1) means all revenue earned by the Federal Reserve, not profits, and therefore permits CFPB funding even during periods when the Federal Reserve’s expenses exceed its income.
That conclusion is wrong—statutorily, structurally, historically, and constitutionally.
Judge Jackson’s interpretation creates a serious and unnecessary constitutional problem under the Appropriations Clause of the Constitution, misreads the statutory text, disregards settled accounting principles governing the Federal Reserve, improperly relies on agency practice to override statutory limits, and conflicts with controlling Supreme Court precedent—including Loper Bright Enterprises v. Raimondo (2024), which forecloses deference to agency interpretations of law.
This article takes no position on whether, as a matter of policy, it is good or bad for the CFPB to be shuttered completely or limited to performing only functions that are statutorily required. As discussed in another blog post and a recent webinar, the CFPB has published a very ambitious regulatory agenda which includes many proposed regulations that are supported in whole or in part by the consumer financial services industry, including regulations under Section 1033 of Dodd-Frank (open banking), Section 1071 of Dodd-Frank (small business loan data collection), and the Equal Credit Opportunity Act. We strongly support the CFPB conducting a careful analysis of the comments it has received, responding to them, and adopting appropriate final regulations covering these and other items on its regulatory agenda. If additional funds are needed to do so, then the CFPB should seek them through lawful means, such as requesting a Congressional appropriation.
The article linked here explains why “combined earnings” must be read to mean profits, not gross revenue, and why the court’s contrary conclusion cannot be sustained.
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