CFPB Stifling Money on Hand as GOP Lawmakers Eye Full Defunding

Federal consumer protection workers say the agency created to police big banks and other financial companies is already being hollowed out from within, even before Congress votes on a proposal to eliminate its funding entirely.

The Consumer Financial Protection Bureau isn’t using its roughly $700 million in reserves and is essentially “grounded” under acting Director Russell Vought, CFPB Union President Cat Farman said in an interview following a Thursday press conference outside of the agency’s headquarters in Washington, D.C.

“Even that money isn’t being spent right now,” Farman said. “We have a reserve, but under Russ Vought, he’s not allowing us to do our work and use the budget that is available to us to actually protect consumers and do oversight of the big banks.”

The remarks come as the Senate Banking Committee, led by Chairman Tim Scott (R-S.C.), proposes to fully eliminate the CFPB’s funding through the Federal Reserve under its portion of Republicans’ massive tax and spending deal, Bloomberg News reported.

The union’s concerns also follow a sweeping freeze implemented by Vought earlier this year that essentially brought all of the CFPB’s work to a halt and canceled the bureau’s next funding request from the Fed.

In a February post on X, Vought called the CFPB’s $711.6 million balance “excessive” and said he wouldn’t draw further funds from the Fed.

“This spigot, now long contributing to CFPB’s unaccountability, is now being turned off,” Vought said in his post.

The CFPB didn’t immediately respond to a request for comment.

CFPB Funding

Under the 2010 Dodd-Frank Act, the CFPB is funded through the Fed and doesn’t rely on the annual congressional appropriations process. The US Supreme Court upheld the funding mechanism in a ruling last May.

The Senate GOP proposal would essentially codify Vought’s constraints, subjecting the CFPB to congressional appropriations and potentially stripping it of its funding entirely. The House-passed version of the budget reconciliation package (H.R. 1) would instead slash the CFPB’s funding by about 70% in fiscal 2025.

The current freeze on CFPB work could render the bureau’s reserves meaningless if Senate Republicans succeed in removing the agency’s independent funding mechanism, Farman said.

“If they pass this bill, we’re not spending it now and it’s never going to get spent,” Farman said.

The city of Baltimore sued Vought seeking to block him from draining the CFPB’s funds. But the Baltimore plaintiffs dropped their case last month after a federal judge in Maryland ruled there wasn’t any evidence that the CFPB had made a decision to transfer money back to the Fed or the Treasury Department or taken any action to do so.

Separation litigation is still pending over the Trump administration’s broader efforts to shutter the CFPB, including by firing most employees, canceling contracts, and deleting data.