Third District Court Rejects OLC’s CFPB Funding Interpretation

The Third District Court struck down the OLC’s take on CFPB’s funding statute.

The U.S. District Court for the District of Oregon, led by Judge Ann Aiken, issued a significant ruling on September 25, 2026, rejecting the Office of Legal Counsel’s (OLC) interpretation of the Consumer Financial Protection Bureau’s (CFPB) funding statute. The OLC had previously concluded in November 2025 that the term “combined earnings” referred only to the Federal Reserve’s profits after deducting interest expenses, which effectively meant that no funds were available to support the CFPB.

Judge Aiken disagreed, finding that “combined earnings” should be understood as the Federal Reserve’s gross revenues prior to expenses, a position consistent with earlier court decisions by Judges Amy Berman Jackson and Edward Davila. This interpretation preserves the CFPB’s statutory funding mechanism that enables it to receive funding directly from the Federal Reserve rather than relying on potentially restrictive annual congressional appropriations.

This mechanism is integral to maintaining the CFPB’s independence in regulating financial institutions and protecting consumers. The Supreme Court had earlier affirmed this funding structure’s constitutionality on May 16, 2024, emphasizing that it does not violate the Appropriations Clause, which requires congressional authorization for government expenditures. As Justice Thomas wrote, an appropriation simply authorizes spending from a specified source for designated purposes, a requirement met by the CFPB funding statute.

The ruling comes amid ongoing legal challenges to the CFPB’s funding, with the OLC's interpretation representing an attempt to constrain the bureau’s financial resources. Judge Aiken’s decision reinforces Congressional intent and legal precedent supporting the CFPB’s operational funding and regulatory authority.