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by David Dayen<\/a><\/strong> November 12, 2025 (Prospect.org)<\/p>\n\n\n\n![\"Russell](\"https:\/\/i0.wp.com\/prospect.org\/wp-content\/uploads\/2025\/11\/Dayen-CFPB-111225.jpg?fit=1200%2C800&ssl=1\")
A legal office in the White House, at the behest of Office of Management and Budget director and Project 2025 architect Russ Vought, has decided to redefine the word \u201cearnings\u201d in order to bankrupt the largely dormant Consumer Financial Protection Bureau. The continuing resolution to fund the government would bar the White House from firing any workers at CFPB, however, despite this new claim that it cannot legally obtain any money to pay them.<\/p>\n\n\n\n
In a notice<\/a> filed in the ongoing federal court case between the agency and the union representing the workers it wants to fire, the CFPB, currently led by its acting director\u2014also Vought\u2014claims that the Office of Legal Counsel (OLC), which writes legal opinions for the executive branch, has determined that the agency cannot request any further money from the Federal Reserve to finance ongoing operations, meaning that all funds will be exhausted by \u201cearly 2026.\u201d<\/p>\n\n\n\n More from David Dayen<\/em><\/strong><\/a><\/p>\n\n\n\n It\u2019s yet another attempt to dismantle an agency that Congress established by statute, based on tortured textual readings. This comes at a time when credit card, student loan, and automotive loan delinquencies are at or near record highs<\/a> since the CFPB was established in 2010. As unemployment increases, having a zombie regulator of consumer debt would be catastrophic. But that\u2019s what Vought has determinedly sought for months.<\/p>\n\n\n\n Under the statute<\/a> that created CFPB, the Bureau receives its funds not from congressional appropriations but from a transfer from the Fed, which previously had responsibility for numerous consumer financial protection laws. The CFPB requests funds on a quarterly or annual basis, and the Fed transfers the funds, available \u201cfrom the combined earnings of the Federal Reserve System.\u201d<\/p>\n\n\n\n The current Supreme Court deemed the funding structure of the CFPB lawful in 2023.<\/p>\n<\/blockquote>\n\n\n\n Earlier this year, Vought declined to seek a draw<\/a> from the Fed because he said CFPB had an adequate amount of funding. Since then, funding for CFPB has been cut roughly in half by the One Big Beautiful Bill Act, which reduced the cap on the amounts CFPB can draw from the Fed.<\/p>\n\n\n\n But recently, Vought has put forward the rather outlandish notion that \u201cthe Federal Reserve currently lacks combined earnings from which the CFPB can draw,\u201d and asked OLC for an opinion on the subject. The OLC\u2019s response, which was filed with the court, notes that since 2022, costs at the Federal Reserve (including operating expenses, and interest on excess reserves to depository institutions) have exceeded revenue (mostly from securities and interest income and service fees for things like check clearing). In 2024, the Federal Reserve lost about $77.6 billion<\/a>.<\/p>\n\n\n\n Since the Fed is losing money, there are no \u201ccombined earnings\u201d (\u201ccombined\u201d meaning all of the 12 Federal Reserve Banks across the country) from which CFPB can draw its portion, according to OLC. \u201cIf the Federal Reserve has no profits, then it cannot transfer money to the CFPB,\u201d the memo says.<\/p>\n\n\n\n The OLC memo puts forward a strained definition of \u201cearnings\u201d as solely \u201cprofits,\u201d even though earnings could also mean gross earnings. Indeed, in the Fed\u2019s financial statement, it posts the loss as \u201cnet earnings,\u201d meaning it had to modify the term in order to accurately define it. The statute only says \u201ccombined earnings,\u201d and reading it to suggest that the CFPB may draw on Fed funds to prevent financial scams only in years when the Federal Reserve is a moneymaker defies all logic. Incidentally, the Federal Reserve Board of Governors would have to close up shop if this argument about combined earnings is correct, yet somehow Russ Vought and the OLC are not demanding the immediate elimination of the sole monetary policy body in the United States.<\/p>\n\n\n\n Even within its memo, OLC defines \u201cnet earnings\u201d as \u201cnet income\u201d but then just defines \u201cearnings\u201d as \u201cprofits,\u201d rather than income, which the Federal Reserve has more than enough of to fund CFPB.<\/p>\n\n\n\n This is not a new theory. For a few years now, former Harvard professor Hal Scott has<\/a> claimed<\/a> that the \u201ccombined earnings\u201d language in the CFPB statute means that it cannot receive money when the Fed operates at a loss. Georgetown Law professor Adam Levitin has previously made quick work<\/a> of this argument. \u201cIt\u2019s hard for anyone to fairly get to Scott\u2019s reading of the statute without being seriously motivated,\u201d he wrote. \u201cIt is not a call to heed the law, but a call for the President to ignore the law based on his own arbitrary whim, usurping the powers of both Congress and the judiciary.\u201d<\/p>\n\n\n\n Every court that has encountered this argument has declined to take it up<\/a>. The Supreme Court also deemed the funding structure of the CFPB as lawful<\/a> in 2023, and did not redefine \u201ccombined earnings\u201d as net earnings or profits in the course of that opinion.<\/p>\n\n\n\n Levitin has reserved similar scorn<\/a> for the OLC\u2019s legal maneuvering. \u201cOLC has long had a measure of respect and credibility for its independence,\u201d he wrote. \u201cBut with opinions like this, the OLC has squandered that reputation \u2026 It is just another political apparatchik office.\u201d<\/p>\n\n\n\n Many of the CFPB\u2019s functions are statutorily obligated, and failing to adhere to them would violate the constitutional requirement that the executive branch take care that the laws are faithfully executed. What little deregulatory work Vought is eagerly engaged in would also have to stop.<\/p>\n\n\n\n The OLC memo suggests that CFPB could simply request appropriations from Congress. This is, of course, something that conservatives have long called for, to make CFPB dependent on Congress and therefore put at the whim of powerful men fattened by bank contributions. The whole point of the CFPB\u2019s funding structure, which again was found constitutional by the current John Roberts\u2013led Supreme Court, was to insulate CFPB funding from politics.<\/p>\n\n\n\n To be sure, under Vought the agency has been all but shut down, with the majority of its staff no longer doing any work. Vought has attempted to fire the vast majority of CFPB employees over the past several months but has been stymied by the courts. This OLC memo is the latest attempt to achieve that mass firing by putting the CFPB into bankruptcy.<\/p>\n\n\n\n There is a problem for Vought, however. The continuing resolution to end the government shutdown includes a section prohibiting the Trump administration from carrying out any reductions in force through the duration of the funding approved, which ends January 30. According to the text, this prohibition holds \u201cwithout regard to the source of funding.\u201d In other words, even though CFPB has not received any money from congressional appropriations, the prohibition means that CFPB staff could not be fired.<\/p>\n\n\n\n That puts Vought\u2019s team in a tricky situation. They cannot fire any CFPB staff, yet they claim they will run out of money in early 2026. Even if they could take money from the Fed, the halving of the statutory cap means that the agency can\u2019t fund the current staff levels. Yet it can\u2019t fire anyone either.<\/p>\n\n\n\n Attorneys and former CFPB employees suggest that the court that\u2019s hearing the case is unlikely to buy the argument that a Fed that fails to turn a profit cannot fund CFPB, and that they read the Vought\/OLC effort as an attempt to get around the injunction on firing staff that is currently in place. In response, the National Treasury Employees Union, which represents CFPB staffers, could file a motion to force CFPB to request funds from the Fed as emergency relief.<\/p>\n\n\n\n First, I want to thank you for reading the Prospect<\/em>. At the end of the day, you\u2019re helping build a more just and fair world by taking the time to read independent and fearless journalism. We hope that when you read our work it isn\u2019t just idle entertainment or cynical ragebait, but something that informs and inspires you. If you agree with that, and I hope you do, we\u2019re asking that you take the next step and consider supporting our work. We don\u2019t have corporate sponsors or billionaire backers \u2013 we have you, our readers. A significant portion of the money it takes to send reporters into the field to write the hard-hitting stories you expect from the Prospect<\/em> comes from readers just like you. Can you chip in today? Your support funds deeply reported investigations into power, how it works, and what it means for you.<\/p>\n\n\n\n Donate<\/a><\/p>\n\n\n\n Mitchell Grummon<\/strong> March 3, 2025<\/a><\/p>\n\n\n\n February 9, 2025<\/a><\/p>\n\n\n\n ddayen@prospect.org<\/a><\/p>\n\n\n\n David Dayen is the executive editor of The American Prospect. He is the author of Monopolized: Life in the Age of Corporate Power (2020) and Chain of Title: How Three Ordinary Americans Uncovered… More by David Dayen<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Stymied from firing most of the staff, Vought hit upon a new idea: He\u2019s not allowed to seek any funding. by David Dayen November 12, 2025 (Prospect.org) A legal office in the White House, at the behest of Office of Management and Budget director and Project 2025 architect Russ Vought, has… Continue reading \n
Publisher<\/em><\/p>\n\n\n\nRecommended Reading<\/em><\/a><\/h3>\n\n\n\n
CFPB to Employees: When We Said Stop Work, We Didn\u2019t Mean Stop Work!<\/a><\/h4>\n\n\n\n
Vought Stops CFPB From Functioning With Illegal Order<\/a><\/h4>\n\n\n\n
CFPB Slashed to the Bone, Threatening Financial Markets<\/a><\/a><\/h4>\n\n\n\n
David Dayen<\/a><\/h2>\n\n\n\n