Court Vacates CFPB Funding Decisions, Declines FY2026 Injunction

Federal Court Vacates the CFPB Funding Decisions in New York v. Vought

A federal judge in Oregon has vacated the two decisions by which the Consumer Financial Protection Bureau's Acting Director sought to stop drawing the agency's funding from the Federal Reserve. Other courts had already blocked him from acting on them, and the opinion records that funding requests continued while this case was pending. The September 25, 2026 order declares those decisions contrary to law and a separation-of-powers violation, and expressly declines to issue an injunction about fiscal year 2026 funding.

Information last verified on October 5, 2026. This is a developing story; we update it as the record changes.

Status: Opinion and Order granting plaintiffs' motion for partial summary judgment, signed September 25, 2026 by United States District Judge Ann Aiken, District of Oregon, Eugene Division, No. 6:25-cv-02384-AA, Document 86 (40 pages). This is a single federal district court decision. The opinion itself says nothing about an appeal of this ruling, and at least one claim in the case was not resolved by the motion.

Jurisdiction scope: This article addresses one federal district court ruling about how the CFPB draws its funding under 12 U.S.C. § 5497, and what that order does and does not do. It does not address state debt collector licensing, any individual consumer's claim, or the merits of the appeals pending in other circuits. For the consumer statutes the Bureau administers, start with our debt collection law hub.

What Happened

On September 25, 2026, United States District Judge Ann Aiken issued a 40-page Opinion and Order in State of New York v. Vought, No. 6:25-cv-02384-AA (D. Or.), Document 86, granting the plaintiff states' motion for partial summary judgment (ECF No. 28) after oral argument.

The plaintiffs are the States of New York, Oregon, New Jersey, Colorado, California, Arizona, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Rhode Island, Vermont and Wisconsin, the Commonwealths of Massachusetts and Virginia, and the District of Columbia. The defendants are the CFPB, Russell T. Vought in his official capacity as Acting Director, and the Board of Governors of the Federal Reserve System. A footnote on page 3 explains that the Board of Governors was named "for purposes of relief, rather than on the merits," and that it offered no separate arguments on the motion.

The decisions the court reviewed

The opinion defines its own terms with care, and the definition matters more than any headline. At page 12, the court identifies the two agency decisions the plaintiffs attacked:

In their motion, they focus on two points: (1) Vought's determination that he cannot request funds from the Federal Reserve at any time when the Federal Reserve's interest expenses exceed its income; and (2) Vought's decision not to request funding for the CFPB from the Federal Reserve for fiscal year 2026 (the "Challenged Decisions").

Opinion and Order at 12 (citing Pl. Mot. 3).

Those two items, and only those two, are what the court later vacated. The phrase is repeated verbatim in the Remedy section at page 38.

How the dispute arose

The opinion's background section lays out a sequence. Vought became Acting Director of the CFPB in February 2025. On February 8, 2025, he wrote to then-Federal Reserve Chair Jerome Powell that no additional funds were necessary for fiscal year 2025 and that he was "requesting $0," a position the court notes rested at that time on the agency's cash reserves rather than on any claim that the Bureau could not draw funds at all.

Efforts to wind down the Bureau were then restrained by an injunction from the U.S. District Court for the District of Columbia in National Treasury Employees Union v. Vought, 774 F. Supp. 3d 1 (D.D.C. 2025), vacated and remanded, 149 F.4th 762 (D.C. Cir. 2025), that panel decision itself vacated and rehearing en banc granted, No. 25-5091 (D.C. Cir. Dec. 17, 2025). With that injunction in place, the Acting Director asked the Department of Justice's Office of Legal Counsel whether the Bureau could draw from the Federal Reserve while the Federal Reserve was operating at a loss. In a memorandum dated November 7, 2025, OLC concluded that "combined earnings of the Federal Reserve System" means profits, calculated by subtracting interest expenses from revenues, and that if there are no profits there is nothing to transfer.

On November 20, 2025, Vought sent letters to the President and to Congress adopting that reading. The court quotes them at page 22:

I have determined that the sums available to the Bureau under 12 U.S.C. § 5497(a) will not be sufficient to carry out the authorities of the Bureau under Federal consumer financial law for Fiscal Year 2026. I make this determination on the basis of the conclusion of the Office of Legal Counsel (OLC) within the Department of Justice that there are no funds legally available for the Bureau to request from the Federal Reserve System under 12 U.S.C. § 5497 . . . Any funding needs of the Bureau will necessarily exceed the amount currently available for the Bureau to request under 12 U.S.C. § 5497, which is legally $0.

Opinion and Order at 22 to 23 (quoting Thompson Decl. Ex. 1).

The states filed their original complaint on December 22, 2025. On December 30, 2025, the D.C. district court held in a second ruling that the ordinary meaning of "combined earnings" is all money earned, and that the unilateral decision not to request funding contravened its existing injunction. National Treasury Emps. Union v. Vought, 816 F. Supp. 3d 1, 16 to 20 (D.D.C. 2025). Vought complied under protest and, on January 9, 2026, requested $145 million as the amount necessary for the second quarter of fiscal year 2026. On March 13, 2026, the Northern District of California reached the same reading of the statute in Rise Economy v. Vought, 823 F. Supp. 3d 1013 (N.D. Cal. 2026), and ordered the Acting Director to keep requesting funds consistent with § 5497.

Threshold rulings

Before reaching the merits the Oregon court cleared several defenses. It rejected mootness, reasoning that compliance compelled by another court's temporary injunction does not moot a distinct suit, that the Federal Reserve's apparent return to profitability is beside the point because the contested question is whether the Acting Director may make that profitability determination unilaterally at all, and that treating the case as moot "would expose Plaintiffs to the same harm in the event that the Federal Reserve returned to entering deferred assets" (page 16). It declined to apply prudential mootness. It found standing on an informational-injury theory, because 12 U.S.C. § 5493(b)(3)(D) requires the Bureau to share consumer complaint information with state agencies and 12 U.S.C. § 2809(b) requires it to support publication of mortgage lending data. It declined to dismiss the case as duplicative of the other two suits or to transfer it to the District of Columbia.

The court then held that the November 20, 2025 letters were final agency action under Bennett v. Spear, 520 U.S. 154, 177 to 78 (1997), because the OLC reading "became the 'working law' of the CFPB" (page 23), and that being enjoined from acting on that determination did not make it any less final.

The two merits holdings

First, the court held that § 5497(a)(1) imposes a duty on the Director to communicate the Bureau's funding needs to the Federal Reserve, so that the mandatory transfer can occur. It reasoned that the statute's use of "shall," the Supreme Court's description of the Bureau as the active party that "draws money from the Federal Reserve System" in CFPB v. Community Financial Services Association of America, 601 U.S. 416, 425 (2024), and the absurd results of the contrary reading all point the same way.

Second, on the term at the center of the case, the court looked to primary dictionary definitions of "earnings" and to the statute's purpose, and concluded at page 33 that "combined earnings" of the Federal Reserve "refers to the Federal Reserve's revenue before expenses are subtracted." It noted that the OLC reading had already been rejected by two other district courts and said it was joining them.

The court also granted summary judgment on the constitutional claim, holding that the chosen mechanism was "the frustration of a lawful appropriations system devised by Congress for the CFPB" and that in using it the Acting Director "has arrogated to himself the 'power of the purse,' which belongs exclusively to Congress" (pages 36 to 37), citing Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952) and City and County of San Francisco v. Trump, 897 F.3d 1225 (9th Cir. 2018). Because the APA claims succeeded, the court said it was unnecessary to address the alternative ultra vires claim.

Vacatur and a Declaration, Not an Injunction

This is where precision matters, because several accounts of the ruling described a judge ordering the Bureau to be funded. The order's own operative language, in the Conclusion at pages 39 to 40, is narrower and more specific:

For the reasons set forth above, Plaintiffs' Motion for Partial Summary Judgment, ECF No. 28, is GRANTED. The Court VACATES the Challenged Decisions and grants Plaintiffs declaratory relief in the form of a declaration that the Challenged Decisions were contrary to law, constitute unlawfully withheld agency action, and violate the constitutional separation of powers.

Opinion and Order at 39.

The declaration continues that "combined earnings" in § 5497(a)(1) "means the Federal Reserve's gross revenues without any deduction for its expenses," and that the Federal Reserve is required by that provision to transfer to the Bureau the amount the Director has determined to be reasonably necessary.

On an injunction, the court was explicit. After explaining that vacatur under 5 U.S.C. § 706(2) is "the ordinary remedy for unlawful agency action," citing Alliance for the Wild Rockies v. U.S. Forest Service, 907 F.3d 1105, 1121 (9th Cir. 2018), it wrote at page 39: "In light of the pending end of fiscal year 2026, the Court declines to issue injunctive relief related to funding for the CFPB for fiscal year 2026."

Two consequences follow from reading the order as written. Vacatur is a remedy that strips the challenged decisions of legal effect, so the interpretation they rested on no longer stands as the agency's operative position. That is a consequence of vacatur generally, not a command the Oregon court issued about any particular transfer. And the orders that currently require the Acting Director to keep asking the Federal Reserve for money are the ones described in the opinion as coming from the District of Columbia and the Northern District of California, both of which the opinion says are on appeal.

What the Law Actually Says

The Bureau was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act as an independent financial regulator inside the Federal Reserve System, and Congress gave it authority over eighteen pre-existing consumer protection statutes, among them the Fair Debt Collection Practices Act, the Fair Credit Reporting Act and the Home Mortgage Disclosure Act. CFSA, 601 U.S. at 421 to 22. Those are the statutes behind most of what readers encounter day to day, from validation notices to credit report disputes to the limits on what a collector may do, which we cover state by state in guides such as the New York collection rules and what California permits a collector to do.

Unlike most agencies, the Bureau was given what the Supreme Court called "a standing source of funding outside the normal annual appropriations process." The operative text, quoted by the court at page 8, reads:

Each year (or quarter of such year), beginning on the designated transfer date, and each quarter thereafter, the Board of Governors shall transfer to the Bureau from the combined earnings of the Federal Reserve system, the amount determined by the Director to be reasonably necessary to carry out the authorities of the Bureau under Federal consumer financial law, taking into account such other sums made available to the Bureau from the preceding year (or quarter of such year).

12 U.S.C. § 5497(a)(1), quoted in Opinion and Order at 8.

The draw is capped. Under 12 U.S.C. § 5497(a)(2)(A) the amount transferred in a fiscal year may not exceed a fixed percentage of the total operating expenses of the Federal Reserve System as reported in the Annual Report, 2009, of the Board of Governors: 10 percent of those expenses in fiscal year 2011, 11 percent in fiscal year 2012, and 12 percent in fiscal year 2013 and each year thereafter. Subparagraph (B) adjusts that dollar amount annually by the increase, if any, in the employment cost index for total compensation for State and local government workers published by the Federal Government. The opinion itself refers to the cap only as a certain percentage, and it notes that the Director must account for retained surplus when requesting more. If the Director determines that the Bureau's needs will exceed the cap, 12 U.S.C. § 5497(e)(1) is the route to Congress, which the court described as functioning "only as a backstop." The Supreme Court upheld this structure against an Appropriations Clause challenge in CFSA, 601 U.S. at 421.

The accounting term in dispute has a plain-English source. The Federal Reserve earns interest on securities, fees from services to depository institutions and interest on loans, and pays its necessary expenses out of that income under 12 U.S.C. § 289(a)(1)(A), with any surplus going to the Treasury. When a Reserve Bank's expenses exceed its income it stops remitting and records a "deferred asset," which the opinion describes, quoting Rise Economy, as "essentially borrowing from itself the amount that its earnings failed to cover." Deferred assets began accruing after rate increases that started in late 2022. The whole fight was whether that accounting state means there are no "combined earnings" to transfer.

The order's operative text reaches only the funding mechanism. It vacates two agency decisions and declares what 12 U.S.C. § 5497(a)(1) requires; on our reading it leaves the substantive consumer statutes untouched. The FDCPA and the FCRA are statutes with their own private rights of action and their own state-level analogues, and state attorneys general enforce their own consumer protection laws, which is precisely the interest the plaintiff states asserted here. Remedies that run through state courts, such as the procedures for challenging a wage garnishment, are untouched by a dispute over how a federal agency draws its operating budget. Federal enforcement is a separate question from private and state enforcement, as our coverage of the FTC action over tenant screening reports illustrates.

Analysis: Why This Matters

The following is analysis from the Recording Law Editorial Team.

The most useful thing about this opinion is how narrowly it draws its own perimeter. It identifies two specific decisions, holds them unlawful on statutory and constitutional grounds, sets them aside, declares what the governing term means, and then stops short of the one remedy that would have carried contempt exposure for a fiscal year that was five days from ending. A reader who absorbed only the secondary framing of a judge keeping the agency funded would misunderstand both the mechanism and its limits.

The declaratory piece is still doing work. A declaration that "combined earnings" means gross revenues without deduction for expenses, paired with a declaration that the transfer is required, settles the legal question as between these parties in this court. The court said as much in explaining why declaratory relief was appropriate, invoking the standard that such relief should clarify and settle the legal relations in issue. What it does not do is create a continuing injunction in Oregon that someone could move to enforce for fiscal year 2026.

It is also worth noting what remains open on the docket. The motion sought summary judgment on five of the six causes of action, and the court resolved four of them. The arbitrary-and-capricious claim under 5 U.S.C. § 706(2) was deliberately left out of the motion, and the alternative ultra vires theory was not reached. The opinion does not describe entry of a final judgment, and as of October 5, 2026 we have not verified the appellate posture of this case from a primary source, so we make no claim about it. The convergence the opinion describes, three district courts reading the same two words the same way, is a fact about the current record and not a prediction about any appeal.

How This Affects You

For anyone who deals with the federal consumer finance agencies, three general points follow from the order as written.

The complaint-sharing infrastructure is what the states said was at risk, and it is worth understanding why. The Dodd-Frank Act requires the Bureau to run a single toll-free number, a website and a database for consumer complaints under 12 U.S.C. § 5493(b)(3)(A), to provide timely responses under 12 U.S.C. § 5534(a), and to share complaint information with other regulators including state agencies under 12 U.S.C. § 5493(b)(3)(D). The record in this case described a Government Portal through which state enforcers receive complaint narratives and documentation they cannot get elsewhere. That channel, not any individual payout, was the injury the court found sufficient for standing.

Substantive rights are unchanged by an agency funding ruling. A dispute about where the Bureau's operating money comes from does not alter what a debt collector may say, what a furnisher owes a consumer after a dispute, or the deadlines in any of those statutes. Readers with a live problem should be looking at the statute and at their own state's rules, not at this docket.

Finally, treat the agency's operating posture as a moving fact rather than a settled one. The opinion itself records three district court rulings, two pending appeals and a funding request made under protest, all within roughly ten months. Anything written about the agency's funding, including this article, carries a verification date for a reason.

This is general legal information, not legal advice. It covers a federal district court ruling in the District of Oregon and the federal statutes that ruling construes, and reflects sources verified on October 5, 2026. Laws change and this story is developing; consult a lawyer licensed in your jurisdiction about your specific situation.

Related articles

• Our debt collection law hub
• How wage garnishment works and how it is challenged
• New York debt collection rules
• California debt collection rules
• FTC action over tenant screening reports and the FCRA

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Last updated: 2026-10-05. This is a developing story; details verified as of 2026-10-05.

Frequently Asked Questions

Did the judge order the CFPB to be funded?

No. The order grants vacatur and declaratory relief. It vacates the two Challenged Decisions, declares them contrary to law, unlawfully withheld agency action and a separation-of-powers violation, and declares what 'combined earnings' means and that the Federal Reserve is required to transfer the amount the Director determines. On an injunction the court wrote that in light of the pending end of fiscal year 2026 it declines to issue injunctive relief related to funding for the CFPB for fiscal year 2026.

What exactly are the Challenged Decisions?

The opinion defines them at page 12 as the Acting Director's determination that he cannot request funds from the Federal Reserve at any time when the Federal Reserve's interest expenses exceed its income, and his decision not to request funding for the CFPB from the Federal Reserve for fiscal year 2026. Those two decisions are what the order vacates.

What did the court say 'combined earnings' means?

The court declared that the term in 12 U.S.C. § 5497(a)(1) means the Federal Reserve's gross revenues without any deduction for its expenses. It reached that result from primary dictionary definitions of 'earnings' and from the statute's purpose, and rejected a reading that equated the term with profits calculated by subtracting interest expenses from revenues.

Has the government appealed this Oregon ruling?

The opinion, signed September 25, 2026, says nothing about an appeal of this ruling, and we are not asserting one. The opinion does state that the National Treasury Employees Union case is on appeal to the D.C. Circuit and that Rise Economy v. Vought is on appeal to the Ninth Circuit as Case No. 26-3134.

Does this ruling bind other courts or other states?

The opinion is a decision of one federal district court on a motion for partial summary judgment. The court described itself as joining two other district courts, in the District of Columbia and the Northern District of California, in reading the statute the same way, and noted that both of those decisions are on appeal and that any inconsistency could be addressed there.

Does the ruling change my rights under the FDCPA or the FCRA?

No. The case is about the mechanism by which the Bureau draws its operating funds from the Federal Reserve under 12 U.S.C. § 5497. It does not amend the Fair Debt Collection Practices Act, the Fair Credit Reporting Act or any state consumer protection statute, and it does not change any deadline or remedy under them.

Was anything in the case left undecided?

Yes. A footnote records that the plaintiffs also brought an arbitrary-and-capricious claim under 5 U.S.C. § 706(2) but did not seek summary judgment on it in this motion. The court also said that because the APA claims succeeded it was unnecessary to address the plaintiffs' alternative ultra vires claim. The opinion does not describe entry of a final judgment.

Why was the Federal Reserve Board of Governors a defendant?

A footnote on page 3 states that the Board of Governors was included as a defendant for purposes of relief rather than on the merits, and that it did not offer separate arguments or responses concerning the plaintiffs' motion and claims.

What is a deferred asset and why did it matter here?

The opinion explains that when a Federal Reserve Bank's expenses exceed its income it stops remitting to the Treasury and records a deferred asset, described as essentially borrowing from itself the amount its earnings failed to cover. Deferred assets began accruing after interest rate increases starting in late 2022. The agency's position was that this accounting state meant there were no combined earnings available to transfer.

Can the CFPB request any amount it wants from the Federal Reserve?

No. Under 12 U.S.C. § 5497(a)(2)(A) the transfer in a fiscal year may not exceed a fixed percentage of the Federal Reserve System's total operating expenses as reported in the Board of Governors' Annual Report, 2009: 10 percent for fiscal year 2011, 11 percent for fiscal year 2012, and 12 percent for fiscal year 2013 and thereafter, with that dollar amount adjusted annually under subparagraph (B) by the employment cost index for State and local government workers. The opinion refers to the cap only as a certain percentage, and notes the Director must take any surplus into account. If the Bureau's needs would exceed the cap, 12 U.S.C. § 5497(e)(1) provides a route to Congress, which the court described as a backstop.