The Consumer Financial Protection Bureau (CFPB) is entering a period of unusual uncertainty as it prepares to shift its active litigation to the Department of Justice and furlough some enforcement attorneys. These moves come as the bureau adjusts its operations in response to new legal and funding challenges.
A New Legal Opinion Shifts the Funding Landscape
In mid-November, the U.S. Assistant Attorney General issued a legal opinion concluding that the CFPB’s method of drawing funds from the Federal Reserve is unlawful. The opinion was submitted to the U.S. District Court for the District of Columbia in National Treasury Employees Union (NTEU) v. Russell Vought, stating that the bureau may only rely on Federal Reserve profits or direct congressional appropriations.
The court filing also notes that current funding is expected to sustain the CFPB through at least December 31, 2025.
Leadership Changes and an Attempt to Extend the Acting Director’s Tenure
With Acting Director Russell Vought’s term set to expire in early December, the administration has nominated Stuart Levenbach—one of Vought’s senior aides—to serve as director. Under the Federal Vacancies Reform Act, this nomination allows Vought to stay on as acting director for an additional 210 days. In practice, the move extends the current leadership structure into June 2026.
The CFPB has publicly stated that it anticipates having enough funds to continue operating through the end of 2025.
Growing Questions About the Bureau’s Future
The legal opinion challenging the CFPB’s funding structure marks a significant departure from how the bureau has operated under previous administrations. Historically, the CFPB regularly drew on Federal Reserve earnings to support its activities. The new interpretation argues that the Federal Reserve currently lacks “combined earnings” and that the bureau may operate only as long as its existing cash reserves last—estimated to carry it into late 2025.
Although several lawsuits have raised the same funding argument, no court has endorsed this interpretation to date. Stakeholders are watching the NTEU v. Vought case closely, as its outcome could shape how the CFPB is financed moving forward.
Without congressional appropriations or access to additional Federal Reserve earnings, the bureau could exhaust its resources early next year, prompting potential action in both Congress and the courts.
Congress May Revisit the CFPB’s Funding Structure
The bureau recently acknowledged in a court filing that it could receive funds through the congressional appropriations process—a structure long supported by many congressional Republicans. While Democrats have historically resisted efforts to shift the CFPB to annual appropriations, the current funding situation may shift political dynamics. This week, Rep. Jim Himes, D-Conn., stated that he is “wide open” to considering changes to the bureau’s governance structure, emphasizing the importance of preserving the agency’s consumer protection mission.
A Busy Regulatory Agenda Continues Despite Uncertainty
Even as questions about funding loom, the CFPB is advancing a full rulemaking schedule outlined in its Spring 2025 Unified Agenda. Key items include:
- A new proposal defining unfair, deceptive, or abusive acts and practices (UDAAP)
- Revisions to certain mortgage rules
- A reconsideration of the open banking rule, which received nearly 14,000 comment letters
- Several Equal Credit Opportunity Act-related proposals filed under the shortest possible 30-day comment period, signaling a push to finalize rules while resources remain
The bureau’s rapid pace suggests an effort to secure policy changes before potential funding limitations take effect.
Enforcement Activity Shifts to the DOJ
Regardless of leadership changes or funding constraints, all existing CFPB regulations remain in effect. State attorneys general continue to hold authority to enforce many consumer protection laws, and private rights of action also remain available to consumers. Even if federal enforcement slows, compliance obligations for companies remain unchanged.
As part of its operational adjustments, the CFPB will transfer its active litigation and enforcement matters to the Department of Justice.
Author: Jennifer Evancic
Jennifer.Evancic@ResourceManagement.com
Jennifer Evancic is a third-party auditor valued by creditors and large organizations for her knowledge in call monitoring within the collections industry. With meticulous attention to detail and a firm grasp of regulatory requirements, she ensures compliance with clients’ criteria and state and federal regulations.
Jennifer audits collections calls, ensuring they meet client-specific criteria and comply with regulations, providing valuable insights and maintaining industry standards.
Beyond her auditing responsibilities, Jennifer takes the lead in organizing and facilitating monthly call calibrations. These sessions serve as a collaborative forum where clients and their vendors come together to discuss call monitoring results and address any findings or areas for improvement. Jennifer’s guidance fosters open communication and ensures alignment between clients and vendors, driving continuous improvement in collections practices.
Jennifer stays up-to-date with compliance and industry best practices by participating regularly in peer meetings, regulatory updates and industry webinars. This keeps her informed about emerging issues and ensures she remains a knowledgeable leader in collections compliance.
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