CFPB Shifts Active Litigation to DOJ As Funding Runs Dry

Last week, the Consumer Financial Protection Bureau (CFPB) announced it will transfer its remaining enforcement and litigation duties to the U.S. Department of Justice (DOJ) amid what it described as an imminent funding shortfall. The Bureau, under Acting Director Russell Vought, informed courts that it anticipates exhausting available funds by early 2026 and currently has only enough resources to operate through at least December 31, 2025.

Under the Dodd-Frank Act, the CFPB is funded via transfers from the Federal Reserve’s “combined earnings.” In a legal opinion from the DOJ’s Office of Legal Counsel, it concluded that the Fed’s lack of profits means the Bureau cannot draw further funding, prompting the agency’s decision to shift its caseload and prepare for staff furloughs.

The Bureau’s acting enforcement chief, Mike Salemi, reportedly said at an all-hands meeting last week that all employees would be furloughed at the end of the year, which comes after Acting Director Russell Vought said in a podcast appearance last month that they anticipate shutting down the agency entirely within the next several months.

Salemi also reportedly said that after the DOJ created an enforcement and affirmative litigation unit within its Civil Division earlier this year, all of the agency’s work would take place there beginning next year.

Consumer advocates have criticized the move, saying that it jeopardizes protections for borrowers, while the President of the National Treasury Employees Union 335, which represents CFPB employees, said Vought has “no legal authority” to transfer cases to DOJ.