As reported by Law360 on November 20, the Consumer Financial Protection Bureau (CFPB or Bureau) will hand off its remaining enforcement lawsuits and other active litigation to the U.S. Department of Justice (DOJ) as the Bureau prepares for a potential funding lapse. CFPB staff were informed that DOJ will begin assuming matters from the CFPB’s enforcement and legal divisions in the coming weeks, with transfer logistics to be worked out. It remains unclear whether all pending cases will survive the transition or whether case schedules and continuity will be affected.
Why Now?
As discussed here, earlier this month, DOJ notified the D.C. courts that the CFPB anticipates exhausting available funds in early 2026, attaching an Office of Legal Counsel opinion concluding the Bureau cannot lawfully draw its statutory funding from the Federal Reserve Board (Fed) while the Fed is operating at a loss. The opinion interprets “combined earnings” to mean realized profits, not gross revenues, and warns of Appropriations Clause and Antideficiency Act risks if transfers occur without available earnings. The CFPB expects to operate through at least December 31, 2025 under an existing injunction but may face Antideficiency Act constraints thereafter.
What’s Changing?
The contemplated hand‑off to DOJ would cover the small number of CFPB enforcement matters still pending in federal district and appellate courts, as well as several rule‑challenge suits. Ongoing investigations are expected to remain with the CFPB for now.
In its report, Law360 noted that the CFPB has already dropped nearly two dozen enforcement cases this year and has been hampered by staffing actions and attrition following Acting Director Russell Vought’s decision not to replenish the agency’s cash reserves. Union leaders have criticized the proposed transfer of cases to DOJ as beyond the Director’s authority and warned it could leave harmed consumers without recourse.