CFPB Faces Mass Furloughs and Transfer of Litigation to DOJ

The Consumer Financial Protection Bureau (CFPB) is set to furlough a significant portion of its workforce on December 31, 2025, and transfer its remaining litigation responsibilities to the Department of Justice (DOJ). This decision follows the Trump administration's announcement that it would cease funding the agency through the Federal Reserve, which has historically supported its operations. The CFPB, established in the aftermath of the 2008 financial crisis, is the only federal agency tasked with enforcing consumer financial laws.

Government ExecutiveReutersCFPB Transfers Active Litigation to DOJ as Funding Dwindles (1)

Acting CFPB Director Russell Vought informed a court that the agency is expected to run out of funds and cease operations early next year. The DOJ has already begun to absorb the CFPB's active litigation, including cases against major companies like Experian. The transfer of these responsibilities raises concerns about the DOJ's capacity to manage the influx of cases, especially given recent staff departures from both agencies.

CFPB Transfers Active Litigation to DOJ as Funding Dwindles (1)

The decision has drawn sharp criticism from various stakeholders. Cat Farman, president of the CFPB union, labeled the move as an "illegal power grab" by Vought, asserting that it undermines the bureau's mission to protect consumers. Senator Elizabeth Warren (D-Mass.) echoed these sentiments, stating that the administration's actions are designed to dismantle the CFPB and benefit large corporations at the expense of consumers. Critics argue that the transfer of litigation to the DOJ could jeopardize ongoing cases and diminish the agency's effectiveness in returning funds to consumers harmed by financial misconduct.

CFPB Transfers Active Litigation to DOJ as Funding Dwindles (1)

As of now, the CFPB has only a handful of active enforcement cases remaining. The agency has voluntarily dismissed over 20 cases since Vought's appointment in February. The DOJ will now handle ongoing litigation, including a significant case against Experian and other appellate cases. However, the future of these cases remains uncertain, particularly regarding the DOJ's ability to initiate new investigations or enforce consumer protection laws effectively.

CFPB Transfers Active Litigation to DOJ as Funding Dwindles (1)

The CFPB did not immediately respond to requests for comment regarding the furloughs and litigation transfer. The DOJ also declined to comment on the matter. However, internal communications indicate that CFPB employees are aware of the impending furloughs and are continuing their work until the end of the year.

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As the December 31 deadline approaches, the CFPB's future remains precarious. The agency's ability to function effectively will depend on the DOJ's capacity to manage the transferred cases and the resolution of ongoing legal challenges to the Trump administration's funding decisions. The situation is evolving, and further developments are expected as stakeholders respond to the impending changes.

CFPB Transfers Active Litigation to DOJ as Funding Dwindles (1)

• “This is Russ Vought’s latest illegal power grab in his ongoing plan to shut down the CFPB and protect CEOs instead of consumers,” — Cat Farman, President of the CFPB Union

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• “The Administration is transferring away all of the CFPB’s active litigation, critical work that the CFPB does to return billions of dollars directly to Americans cheated by big banks and giant corporations,” — Senator Elizabeth Warren, D-Mass.

CFPB Transfers Active Litigation to DOJ as Funding Dwindles (1)