The Trump administration is continuing its campaign to shut down the Consumer Financial Protection Bureau (CFPB), as Director of the Office of Management and Budget Russell Vought, in his official capacity as Acting Director of the Consumer Financial Protection Bureau, has issued a court filing, National Treasury Employees Union, Plaintiffs, v. Russell Vought, stating, "[the] defendants respectfully submit this notice to inform the Court and the parties that the Consumer Financial Protection Bureau anticipates exhausting its currently available funds in early 2026."
The CFPB was established by the Dodd-Frank Act of 2010 in response to the 2008 financial crisis. Its mission is to protect consumers from unfair, deceptive, or abusive practices in financial products such as mortgages, credit cards, and loans. The Bureau enforces consumer financial laws, supervises banks and other financial institutions, issues rules, and provides educational resources.
The CFPB has reportedly returned more than $20 billion to consumers cumulatively, with additional savings tied to fee reductions that are measured in the billions each year.
Funding of the CFPB
The CFPB is not funded through the congressional appropriations process like most federal agencies, but it's funded directly by the Federal Reserve System. Each quarter, the CFPB requests the amount of funding it needs from the Federal Reserve, up to a statutory cap based on a percentage of the Federal Reserve’s annual operating expenses (roughly 12% of the Fed’s total operating budget). The CFPB Director then determines the amount “reasonably necessary” to carry out the Bureau’s duties, and any funds not used are returned to the U.S. Treasury.
Politico reports that the Justice Department believes that “combined earnings” refers to profits. “If the Federal Reserve has no profits, it cannot transfer money to the CFPB,” the DOJ wrote in its filing.
A First Attempt at Shutdown
During Donald Trump’s first term as President, his administration pursued a series of actions that collectively aimed to curb the authority, independence, and enforcement power of the CFPB. While the agency was not formally abolished, several major steps were taken to limit the reach of the Bureau.
One of the Trump administration’s earliest moves was the appointment of Mick Mulvaney — a vocal critic of the Bureau — as acting CFPB director. Under his leadership, the CFPB froze hiring, halted new investigations, slowed rule-making, and reduced enforcement activity. The agency also rewrote its mission statement to emphasize reducing regulatory burdens on financial institutions, signaling a shift away from aggressive consumer protection.
Trump officials also rolled back key regulations, most notably dismantling major portions of the CFPB’s payday lending rule by eliminating mandatory ability-to-repay underwriting requirements. A number of enforcement cases — particularly those involving payday lenders and fair-lending concerns — were dropped, delayed, or settled for reduced penalties.
At the structural level, the administration backed legal challenges arguing that the CFPB’s single-director, independent structure was unconstitutional. This effort culminated in the Supreme Court’s 2020 Seila Law v. CFPB ruling, which made the director removable by the president, reducing the Bureau’s long-standing independence.
Mulvaney also requested zero dollars in quarterly funding at one point, relying on reserves, a symbolic attempt to constrain the agency’s operations and budget.
Together, these actions did not eliminate the CFPB during the first Trump administration, but they reflected an effort to weaken the Bureau’s enforcement capabilities, limit its independence, and reshape its mission, fundamentally altering how the agency operated.
A Second Attempt
The administration took more aggressive steps to limit the CFPB during President Trump’s second term.
In early 2025, acting leadership froze nearly all CFPB operations, including investigations, rule-making, and enforcement actions, while temporarily suspending public communications. Combined with challenges to the agency’s funding from the Federal Reserve, the bureau could face a shortfall in early 2026 unless Congress intervenes.
A federal judge has blocked some actions, including mass layoffs and deletion of sensitive consumer data, but the Bureau remains in the precarious position it finds itself in today.
Industry observers feel the Trump administration’s moves are an attempt to weaken CFPB independence, potentially reshaping federal oversight of financial institutions.
