financetom
Economy
financetom
/
Economy
/
Trump administration asks Fed to clarify CFPB funding availability
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
Trump administration asks Fed to clarify CFPB funding availability
Mar 10, 2026 10:46 PM

WASHINGTON, Dec 17 (Reuters) - The U.S. Justice Department has called on Federal Reserve Chair Jerome Powell to clarify whether the central bank has stopped losing money, which President Donald Trump's administration has said prevents it from funding the sole federal watchdog for consumer financial protection, according to court records.

The request comes as the U.S. Consumer Financial Protection Bureau says it could exhaust its remaining funds in as little as two weeks and has warned staff of impending job cuts. The agency is facing legal demands in two federal lawsuits demanding that it resume requesting its funding.

Trump and other senior officials have called for the agency's outright elimination, which workers and the agency's defenders say is illegal, but CFPB leadership also revealed preparations suggesting the agency could continue some functions.

FED RETURNING TO PROFITABILITY?

Unlike most federal agencies, the CFPB draws its funds from the Fed rather than appropriations from Congress.

In a letter to Powell on Tuesday, Assistant Attorney General Brett Shumate said a recent Justice Department opinion had concluded the CFPB could not request funding so long as the Fed had "no profits."

"There has since been reporting that the Federal Reserve System is returning to profitability and may have or may soon have combined earnings" under the administration's definition, the letter said, asking Powell to say whether the Fed in fact had such earnings and anticipated continuing to have profits in the coming weeks. 

A Federal Reserve spokesperson declined to comment.

Lawyers for CFPB workers seeking to reverse Trump's potential dismantling of the CFPB, as well as pro-consumer non-profits, have rejected the Trump administration's arguments and called on courts to direct it to resume CFPB funding. Federal courts have also recently rejected the view that the Fed can only fund the CFPB when operating at a surplus.

In a recent legal opinion, five former top Fed officials also refuted the administration's position, saying it failed to understand the way the central bank operates.

"The very concept of 'profit' does not translate neatly to the context of a central bank, since the primary purpose of a central bank is not to make money in the way a private business does, nor does the failure to generate 'profit' adversely affect the Federal Reserve's ability to operate," they wrote.

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
US Economy Expanded at 'Slight to Moderate Pace,' Beige Book Shows
US Economy Expanded at 'Slight to Moderate Pace,' Beige Book Shows
Jul 15, 2026
02:24 PM EDT, 07/15/2026 (MT Newswires) -- The US economy expanded at a slight to moderate pace in 11 of the 12 Federal Reserve districts, while the other district reported no change, the Federal Reserve's most recent Beige Book update released Wednesday showed. This was little changed from the previous Beige Book, the Fed said. Consumer spending was slightly higher,...
Federal Reserve Watch for July 15: Warsh Repeats FOMC Will Take Ownership of Inflation, Act as Needed
Federal Reserve Watch for July 15: Warsh Repeats FOMC Will Take Ownership of Inflation, Act as Needed
Jul 15, 2026
03:18 PM EDT, 07/15/2026 (MT Newswires) -- Fed Chairman Kevin Warsh (voter) repeated that the FOMC will take ownership of inflation and take actions if needed to bring it back toward the 2% goal but did not provide forward guidance. Warsh again said that monetary policy caused inflation through its policy and that would not be the case under his...
Busiest US container port sets cargo record in June
Busiest US container port sets cargo record in June
Jul 15, 2026
LOS ANGELES, July 15 (Reuters) - The Port of Los Angeles, the busiest U.S. container seaport, said on Wednesday it set a June cargo record as shippers ranging from retailers to data center builders rushed in goods to avoid higher fuel costs and new U.S. import tariffs. The Southern California port handled 1,002,734 20-foot equivalent units (TEUs) last month, 12% more...
Economic activity on the rise and inflation may be improving, Fed survey shows
Economic activity on the rise and inflation may be improving, Fed survey shows
Jul 15, 2026
July 15 (Reuters) - U.S. economic activity increased slightly in recent weeks, employment rose, and companies and households indicated that inflation may have improved, the Federal Reserve said on Wednesday, in a report that will help shape the policy debate when Kevin Warsh leads his second interest rate-setting meeting in two weeks. Contacts generally expected the economy to continue to expand in...
Copyright 2023-2026 - www.financetom.com All Rights Reserved