The American Financial Services Association (AFSA) has announced that the Consumer Financial Protection Bureau (CFPB) is legally blocked from accessing its usual funding source, the Federal Reserve, and is expected to run out of money in early 2026.
According to the U.S. Department of Justice’s Office of Legal Counsel (OLC), the CFPB may not draw funds from the Federal Reserve because the Fed has reported net interest losses since 2022, leaving no "combined earnings" available under 12 U.S.C. §5497(a)(1). This situation arises from the agency's unique reliance on Federal Reserve profits rather than congressional appropriations.
The CFPB said in a legal filing that it "anticipates exhausting its currently available funds in early 2026" after the OLC determined it cannot lawfully draw additional money from the Federal Reserve due to the absence of Fed profits since 2022. The Bureau warned that without congressional action, core supervision and enforcement functions may face disruption once remaining reserves are depleted.
Under Dodd-Frank legislation, the CFPB is funded through quarterly transfers from the Federal Reserve’s "combined earnings," a mechanism intended to shield the agency from political pressure. However, according to recent interpretations by the DOJ, actual net profits are required for these transfers to occur. Because the Federal Reserve has posted net interest losses since 2022, the CFPB now lacks access to its usual funding pipeline, raising significant operational and legal concerns.
AFSA serves as a leading national trade association for the consumer credit industry, representing providers of auto finance, traditional installment loans, specialty finance, and mortgage services. The organization advocates for balanced federal and state regulation and closely monitors policy changes impacting consumer credit markets, including shifts affecting federal agencies such as the CFPB.
