Fed Transfers Funds To CFPB For Agency Operations

The Federal Reserve has transferred funds to the Federal Reserve Bank of New York to pay the expenses of the CFPB for the third quarter of this fiscal year, according to a letter posted on the agency’s website.

The letter from Federal Reserve Chief Financial Officer Rendell Jones to CFPB Chief Financial Officer Janfar Gueye does not disclose the amount of the deposit, but the bureau requested $75.8 million.

That compares with $104.2 million the CFPB received during the 3^rd Quarter of Fiscal Year 2024, $248.9 million for the 1st Quarter of FY 2025, $0 during the 3^rd Quarter of Fiscal Year 2025, $0 during the 1^st quarter of Fiscal Year 2026 and $145 million during the 2^nd Quarter of Fiscal Year 2026 . However, the One Big Beautiful Bill enacted last year reduced the CFPB’s funding from 12% to 6.5% of the Fed’s 2009 total operating expenses (adjusted for inflation). According to the government’s March 31 filing in the Treasury Union case, the maximum the CFPB can request from the Fed for Fiscal Year 2026 is $466.8 million. Based on the requests made so far, the maximum that the CFPB can request for the remainder of the fiscal year is $246 million.

While Section 1071 of Dodd-Frank requires that the amount requested “be reasonably necessary to carry out the authorities of the Bureau under Federal consumer financial law, at the time he made the request Acting CFPB Director Russell Vought said in a letter to Fed Chairman Jerome Powell that he is confident that the Bureau could operate on even less money than $75.8 million.

“The number does not reflect the amount that I believe to be necessary for the Bureau to perform its statutory functions,” Vought wrote, in the letter. He said he believes that the Bureau can perform its duties with a “significantly smaller budget.”

Vought said he was making the request in response to a preliminary injunction issued by U.S. District Judge Amy Berman Jackson, who has said that massive layoffs and other actions to cut back the Bureau would amount to shutting it down. The statement by Vought that the CFPB can perform its statutory functions with less than $75.8 million is interesting in view of the government’s assertion in the recent filing in the Treasury Union case that the preliminary injunction requires the CFPB to maintain funding at the level provided before the One Big Beautiful Bill, which the government claims is $677.5 annually.