The Trump administration is moving forward to shut down the Consumer Financial Protection Bureau (CFPB), arguing in court that the funding mechanism for the consumer watchdog is invalid.
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The CFPB is funded by the Fed’s surplus capital, although the central bank has been operating at a loss since 2022. As a result, the administration believes that the CFPB should be legally blocked from obtaining additional Fed funds.
CFPB Funding Set to Run Dry in ‘Early 2026’
The CFPB is a federal agency that protects people from unfair or deceptive practices by banks, credit card companies, and other lenders, and has returned over $21 billion to consumers since it was created in 2010 as part of the Dodd-Frank Act. Supporters of the watchdog argue that dismantling it would place consumers at risk of misleading financial practices.
The CFPB stated that it currently has enough funding to operate until at least the end of 2025, although it “anticipates exhausting its currently available funds in early 2026.”
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