Senate Democrats introduce bill to automatically fund CFPB

All 11 Democrats on the Senate Banking Committee have introduced legislation that would
“automatically and fully fund” the Consumer Financial Protection Bureau, seeking to shield the agency from future funding cuts and political interference.

The bill, introduced June 4 and led by Ranking Member Sen. Elizabeth Warren, would require mandatory transfers to the CFPB equal to at least 12% of the Federal Reserve’s total operating expenses. The Federal Reserve is typically the agency’s primary source of funding.

Funding would continue up to the amount deemed reasonably necessary for the agency to carry out its responsibilities under federal consumer financial laws.

“The Trump Administration launched an assault on the Consumer Financial Protection Bureau, trying to drain it of its resources so it could no longer stop big banks and giant corporations from scamming Americans out of their money,” Warren said in a statement. “Democrats are united in fully funding the CFPB when we take back Congress.”

According to Warren and her colleagues, the CFPB has returned more than $21 billion to consumers through enforcement actions and other remedies since its creation following the 2008 financial crisis.

The legislation is backed by several consumer advocacy groups, including the National Consumer Law Center, Consumer Federation of America, the National Community Reinvestment Coalition and more.

Alys Cohen, director of federal housing advocacy and acting co-director of federal advocacy at the National Consumer Law Center, said restoring CFPB funding is critical as consumers face growing threats.

“The cost of living has skyrocketed, and in the face of growing risks from predatory payday lending apps and crypto scams, this Administration is actively gutting the Consumer Financial Protection Bureau,” Cohen said in a statement.

Adam Rust, director of financial services at the Consumer Federation of America, said the legislation would establish a funding floor and make transfers mandatory, ensuring the agency can continue pursuing enforcement actions against financial firms.

“This bill ensures that invented legal theories cannot sideline the CFPB from protecting people from financial predators. The CFPB’s record speaks for itself. Every dollar the Fed has sent to the CFPB has been returned many times over to consumers through direct remedies and avoided harms,” Rust said.

The backstory

The proposal comes as Democrats accuse President Donald Trump and his administration of weakening the consumer watchdog by restricting its resources. In November of last year, the administration declared that the agency’s funding is unlawful in a court filing and that the agency cannot legally request funds from the Federal Reserve under the Dodd-Frank Act.

Following that filing, a coalition of consumer advocacy groups sued Dec. 5 to block what it described as an effort by acting CFPB Director and White House budget chief Russell Vought to effectively dismantle the agency by cutting off its funding. The coalition’s suit claimed that since February 2025, Vought has not sought new funding for the CFPB, instead relying on reserve funds, which were expected to be depleted in early 2026.

In March, a federal judge ruled that the agency must continue to get its funding from the Federal Reserve as the law requires, ultimately squashing Vought’s public intentions to shut the agency down that he vocalized in October 2025.