Oregon Federal Court Rules CFPB Funding Refusal Violated Federal Law

Case Snapshot

• Court: U.S. District Court for the District of Oregon
• Case: State of New York, et al. v. Russell T. Vought, et al., No. 6:25-cv-02384-AA
• Decision Date: Sept. 25, 2026
• Core Issue: Whether CFPB leadership could refuse to request Federal Reserve funding based on an interpretation that “combined earnings” existed only when the Federal Reserve generated profits.
• Key Allegation: The plaintiff states argued that the funding refusal violated the Dodd-Frank Act, the Administrative Procedure Act, and the constitutional separation of powers.
• Court Holding: The court held that “combined earnings” means Federal Reserve gross revenue before expenses and that the CFPB director has a statutory duty to communicate the bureau’s funding needs to the Federal Reserve.
• Outcome: Partial summary judgment granted to the states. The challenged funding decisions were vacated, and declaratory relief was granted.
• Notable Detail: The court declined to issue additional injunctive relief concerning fiscal year 2026 funding because the fiscal year was about to end.

A federal judge in Oregon has ruled that acting Consumer Financial Protection Bureau Director Russell Vought and the CFPB violated federal law by refusing to request funding from the Federal Reserve based on their interpretation of the bureau’s statutory funding mechanism.

U.S. District Judge Ann Aiken granted partial summary judgment to 22 states and the District of Columbia in New York v. Vought, finding that the funding decisions violated the Administrative Procedure Act and the constitutional separation of powers. The Sept. 25 ruling also vacated the challenged decisions and declared that the Federal Reserve must transfer funding determined by the CFPB director to be reasonably necessary for the bureau’s operations.

The decision adds another federal court ruling against the CFPB leadership’s attempt to rely on the Federal Reserve’s financial performance as a basis for withholding funding from the agency.

Dispute Centers on Meaning of ‘Combined Earnings’

The dispute stems from the Dodd-Frank Act, which directs the Federal Reserve to transfer money to the CFPB from the Federal Reserve System’s “combined earnings.” Unlike most federal agencies, the CFPB generally receives its operating funds outside the annual congressional appropriations process.

In November 2025, the Justice Department’s Office of Legal Counsel concluded that “combined earnings” meant Federal Reserve profits after certain expenses. Because the Federal Reserve was operating at a loss, the OLC concluded that funds were unavailable for the CFPB to request.

The CFPB subsequently announced that it could not legally draw additional funds from the Federal Reserve under that interpretation.

Aiken rejected that reading. She concluded that “combined earnings” means the Federal Reserve’s gross revenue before expenses are deducted, agreeing with federal district courts that previously addressed the issue in National Treasury Employees Union v. Vought and Rise Economy v. Vought.

The Oregon court also found that the CFPB director has an affirmative statutory duty to communicate the bureau’s funding needs to the Federal Reserve so that the required transfer can occur.

Court Finds APA and Separation-of-Powers Violations

The court determined that Vought’s decision to request no funding based on the OLC interpretation constituted final agency action reviewable under the APA.

According to the opinion, Vought communicated to the president and Congress in November 2025 that the CFPB considered the amount legally available from the Federal Reserve to be zero. The court found that position became the CFPB’s operative funding policy, even though subsequent court orders required Vought to resume funding requests.

Aiken also sided with the states on their separation-of-powers claim. The court concluded that interfering with the funding structure established by Congress improperly assumed authority over federal spending reserved to Congress.

The court vacated the challenged funding decisions and issued declaratory relief but declined to impose an additional injunction concerning fiscal year 2026 funding because the fiscal year was nearing its end.

CFPB Funding Dispute Has Produced Multiple Court Challenges

The Oregon ruling follows similar decisions in Washington, D.C., and California.

In December 2025, the U.S. District Court for the District of Columbia rejected the same interpretation of “combined earnings” in NTEU v. Vought. Vought subsequently requested $145 million from the Federal Reserve under protest in January 2026.

The Northern District of California reached a similar conclusion in Rise Economy v. Vought in March, finding the CFPB’s reliance on the OLC interpretation violated the APA and ordering the bureau to continue requesting funding necessary to perform its statutory responsibilities. That case was appealed to the 9th U.S. Circuit Court of Appeals.

The D.C. Circuit also continues to have litigation involving NTEU v. Vought. The appeals court heard en banc arguments in that matter in February 2026.