What is Going on at the CFPB: Funding, Furloughs, and APOR
What is going on at the Consumer Financial Protection Bureau (CFPB) lately? It is enough to make your head spin. The latest round of news started back on November 10, 2025, when the CFPB notified the district and appeals courts in its NTEU v. CFPB lawsuit that it anticipates running out of funds in early 2026 (which I wrote about here). This has spurred a flurry of recent activity in the case, which is increasingly becoming a legal fight about the CFPB’s funding. I’ll describe that below. In addition, based on recent media reporting, it appears that the CFPB is gearing up to shut down, including furloughing staff, while simultaneously making some other moves that give the appearance it is planning to continue its activities. I’ll cover those developments as well. And I’ll also provide some thoughts on what all of this means. So, please read on!
Funding: The NTEU Lawsuit Begins a New Chapter of Litigation
On November 21, 2025, the CFPB filed a significant notice in its NTEU lawsuit (which I’ve written about recently here), under which the CFPB is subject to a preliminary injunction preventing it from taking certain steps to shut down the agency, including terminating staff and contracts. In the notice, the CFPB informed both the District Court and the Court of Appeals that the Acting Director sent to the President and Congress a report that is required under the Dodd-Frank Act (12 USC 5497(e)(1)(B)) notifying them of a determination that the agency does not have sufficient funds to operate in 2026. This follows the above-mentioned November 10th notice that the CFPB filed with the courts stating it will run out of funds. In that notice, the CFPB asserted that the federal Antideficiency Act will prevent the CFPB from operating and that it does not interpret the District Court’s preliminary injunction as requiring the CFPB to violate that statute.
The November 21 notice included the Dodd-Frank Act-required report to the President and Congress. The report noted that the Department of Justice (DOJ) determined that the CFPB cannot draw funds from the Federal Reserve because it does not have “combined earnings,” which is the CFPB’s funding source set forth in the Dodd-Frank Act (the CFPB also notified the courts of this determination in its prior November 10 filing). The report states that the CFPB will “run out of funds at some point in the first quarter of Fiscal Year 2026” and that its “funding need” for this next fiscal year is about $279 million.
Notably, the report acknowledges that the CFPB is currently under a court order in the NTEU lawsuit that prevents it from “conducting reductions in force, cancelling contracts, and taking other actions to streamline the Bureau’s functions,” and that the order remains in place while the D.C. Circuit decides on whether to rehear the case en banc. The report also states that the CFPB only has available unobligated funds of about $70 million as of November 17, 2025. Significantly, though, the report does not expressly request additional funds from Congress or the President. This new notice appears to be intended as additional notification to the court that the agency does not plan to operate past early 2026 (as noted above, I previously wrote about this here). It may also be aimed at securing tacit approval for its interpretation that the preliminary injunction does not bar the CFPB’s shutting down based on its interpretation of the Dodd-Frank Act funding mechanism.
But the plaintiffs weren’t having it. On November 23, 2025, the plaintiffs motioned the court to clarify the CFPB’s obligations under the District Court’s preliminary injunction (the aforementioned court order, which I’ve written about here and elsewhere in our blog). The plaintiffs called the CFPB’s interpretation of the term “combined earnings” in the CFPB’s statutory funding provision a “novel interpretation” that was never followed by the CFPB or any court before. Moreover, the plaintiffs asserted that the Federal Reserve has “billions of dollars in ‘combined earnings,’ so there is no basis for the defendants’ assertion that it lacks ‘earnings’ to fund the CFPB.” The plaintiffs asked for clarification because, as the plaintiffs put it, the CFPB “announced that they intend to stop complying with the Court’s injunction.”
On November 24, 2025, the District Court judge in the case directed the parties to submit filings by November 26, 2025 “identifying the provisions of this Court's preliminary injunction that they believe remain in force and addressing this Court's authority to enforce those provisions, given the D.C. Circuit’s opinion of August 15, 2025, and the pending petition for rehearing en banc.” Both parties submitted their responses to the District Court on November 26, 2025, acknowledging that the court’s preliminary injunction remains in effect while the D.C. Circuit decides whether or not to rehear the case en banc (which I wrote about here). The CFPB asked the court to interpret its preliminary injunction “narrowly” and not address “whether Congress has appropriated sufficient funds for the Bureau to discharge all its obligations under statute or court order throughout 2026.” The plaintiffs, on the other hand, asked the court to “clarify the scope of its order and, if it is violated, to enforce it.”
The District Court has yet to rule on the plaintiffs’ request for clarification and enforcement of its preliminary injunction. In addition, the Court of Appeals has yet to rule on whether it will rehear the CFPB’s appeal of the preliminary injunction en banc, meaning that the preliminary injunction is still in effect.
It appears that a legal fight about the CFPB’s funding has begun. Based on past decisions and statements from the District Court judge in this case, it would appear that the District Court will be very concerned about these latest moves by the CFPB. But whether the court will be able to act before the agency runs out of money in early 2026, whether the court believes it has the authority to require the Acting Director to request funds from the Fed, or whether the Fed would provide such funds in light of the DOJ opinion, are open questions. It goes without saying that it will be very interesting to see how the District Court rules on the plaintiffs’ motion. In addition, we are still waiting to find out whether the D.C. Circuit will rehear the matter of the CFPB’s appeal of the preliminary injunction en banc. These multiple streams of litigation will be important to watch, because they will affect the future of the CFPB. We will keep you updated.
Other Moves that Spell Uncertainty for the CFPB’s Future and APOR
It was reported on November 20 that the CFPB will transfer its enforcement cases to the DOJ and will furlough more than 100 of its staff (one other report stated “much of the workforce” would be furloughed). In addition, on November 21, the agency issued a press release stating that it is now requiring its examiners to read a “humility pledge” before each examination. Then on November 25, 2025, it was reported that Acting Director Vought approved the restarting of many enforcement investigations. Some of these moves appear to be planning to shut down. While others appear to be planning for supervision and enforcement activities to restart. What is happening here?
Furloughs and APOR
The November 20 reporting regarding the furloughing of staff was based on an internal “all hands” meeting, in which the announcement was shared with staff. That reporting also indicated that the CFPB is making plans for its eventual cessation of operations because of its lack of funding, including for some essential industry functions, such as calculating the Average Prime Offer Rate (APOR), which is used for many thresholds in the CFPB’s mortgage rules. Apparently, the CFPB is planning to issue public guidance enabling the industry to calculate APOR itself. Such an approach is technically available currently, as long as the calculations follow the CFPB’s methodology, which is outlined in a detailed document. But the industry has never undertaken these calculations on its own, and the industry may balk at such a plan to do so in the future, as it could lead to additional liability and confusion in the industry if parties calculate different APOR values.
Starting Up Exams and Investigations
The CFPB’s November press release regarding the “humility pledge” that examiners will read at the start of new examinations appears to indicate that the CFPB plans to start at least some new supervisory examinations. On the other hand, the move could have been intended to give the appearance that the CFPB will begin new examinations. The CFPB issued a rare press release for this move, and the “humility pledge” was posted on the CFPB’s website (available here). The humility pledge is aligned with past pronouncements of the agency’s supervisory and enforcement priorities (which I wrote about here). The pledge states that the CFPB “will focus its supervision resources on pressing threats to consumers, particularly service members and their families, and veterans, and in the areas that are clearly within the Bureau’s statutory authority.” Among other things, the pledge also states that examination times will be shorter than eight weeks, there will no longer be requests for “expansive data sets or other information which may seem unrelated to the exam or include information inconsistent with Bureau priorities,” and “Matters Requiring Attention will focus on pattern and practice violations of law where there is substantive and identifiable consumer harm or clear violations of the disclosure requirements.”
Further giving the appearance of restarting its engines, it was reported that an internal CFPB email indicated that the Acting Director has approved restarting “many investigations.” And then, as I have written about before (here and here), the CFPB has a lengthy Spring 2025 regulatory agenda. The CFPB has initiated several important proposed rulemakings that have yet to be finalized (including rulemakings on fair lending, open banking, larger participants, and small business loan data collection).
New Appointee for CFPB Director
Another recent development has added another layer of uncertainty to the agency’s trajectory. Recently, on November 18, 2025, President Trump nominated Stuart Levenbach to serve as CFPB Director. Commentators have noted that the nomination may be less about installing a new permanent leader and more about allowing Acting Director Vought to remain in his role, given that a pending nomination can effectively extend the tenure of an acting official. Levenbach previously spent about a decade at the Office of Management and Budget (OMB), including roles as a program examiner in OMB’s Resource Management Office and as a senior policy analyst in the Office of Information and Regulatory Affairs (OIRA)—the White House office responsible for reviewing federal regulations. He also served as Chief of Staff at the National Oceanic and Atmospheric Administration (NOAA), the federal agency focused on weather, oceans, and environmental science. It is worth highlighting that none of these roles meaningfully involved financial services or consumer finance regulation, reinforcing speculation that the nomination is largely strategic and not necessarily intended to result in Senate confirmation in the near term.
What these Developments Mean for the Industry
Looking at these moves together, it is quite confusing. On the one hand, the CFPB is getting ready to shut down. On the other, it is giving the appearance of starting new investigations and examinations, and working on rulemakings. As I noted above, these latter moves could be intended to give the appearance of operating the agency for the benefit its NTEU v. CFPB lawsuit, because the CFPB is arguing in that case that there was no final agency action determining to shut down the CFPB. In addition, the CFPB’s court filings regarding its lack of funding do not appear to conflict with this argument, because the lack of funding ostensibly stems from the Federal Reserve’s lack of “combined earnings” (and the DOJ’s interpretation of that term) rather than any CFPB action.
One thing is for sure: the industry should plan for the CFPB to cease operating in early 2026. In particular, the industry should keep a look out for what will happen with APOR. The CFPB’s reported plan for APOR may increase legal and compliance risk for the industry. In addition, other required functions of the CFPB may need attention and contingency plans. For example, the CFPB’s acceptance of Home Mortgage Disclosure Act (HMDA) reporting and the publication of the data would need to be addressed by the other federal agencies under HMDA. Further, future unissued annual adjustments of certain regulatory thresholds under the Truth in Lending Act and other statutes could become an issue for federal compliance as well as state compliance, as state laws may piggyback off those thresholds. Companies should start thinking about these issues now. But one thing companies should not do is shut down their compliance function just because the CFPB is shut down. Administrations change, and other regulators and state attorneys general are still out there. Case in point regarding state attorneys general: it was recently reported that former CFPB Director Rohit Chopra has reemerged in a new role leading the Consumer Protection and Affordability Working Group of the Democratic Attorneys General Association. According to the reporting, Chopra’s new position is expected to focus on coordinating enforcement efforts and rulemaking activities among states. Could this effort end up filling consumer-protection gaps if the CFPB shutters or scales down, with state regulators stepping forward as the agency’s capacity diminishes? It may be prudent to expect the states to step up.
If you have any questions or would like to discuss any of the issues in this blog, please email me at rich@garrishorn.com.
