Oregon court rejects OLC view on CFPB funding, cites separation of powers
Judge Aiken held that the CFPB Director must request funding based on the Federal Reserve’s gross revenue, rejecting the OLC’s profit-based interpretation and finding a separation-of-powers violation.
On September 25, 2026, Judge Ann Aiken of the U.S. District Court for the District of Oregon ruled that the statutory phrase “combined earnings” in the CFPB’s funding provision refers to the Federal Reserve System’s gross revenues before expenses, not its profits after deducting interest expenses. She rejected the Office of Legal Counsel’s contrary interpretation, which had led Acting Director Russell Vought to decline requesting CFPB funds when the Federal Reserve showed a loss under that calculation. Judge Aiken also held that the CFPB Director has an affirmative duty to request the amount he determines reasonably necessary for the Bureau’s operations, and she vacated Vought’s decision not to seek funding as a violation of the Administrative Procedure Act and the constitutional separation of powers. The decision aligns with two earlier district court rulings (D.C. and Northern California) reaching the same conclusion. Although the court declined to issue an injunction for fiscal year 2026 because the fiscal year was nearing its end, the ruling creates a clear district‑court precedent that the CFPB’s funding mechanism remains operative regardless of short‑term fluctuations in the Federal Reserve’s interest income. Sophisticated counsel should monitor whether the Department of Justice appeals the decision, how the CFPB adjusts its funding requests going forward, and whether Congress considers amending the funding statute to foreclose similar disputes.