WASHINGTON— The U.S. Justice Department has asked Federal Reserve Chair Jerome Powell to clarify whether the central bank has returned to profitability, a determination the Trump administration says could affect whether the Consumer Financial Protection Bureau can receive funding, according to court records cited by Reuters.
The request comes as the CFPB has warned it could exhaust its remaining funds within weeks and has alerted employees to the possibility of job cuts. The Bureau is also facing legal pressure in two federal lawsuits seeking to force it to resume requesting funding, Reuters noted.
President Donald Trump and other senior administration officials have called for the CFPB’s elimination, a move the agency’s supporters argue would be unlawful. At the same time, CFPB leadership has indicated it is preparing to continue at least some functions amid the uncertainty, Reuters noted.
Unlike most federal agencies, the CFPB does not rely on congressional appropriations and instead draws its funding directly from the Federal Reserve.
In a letter sent Tuesday, Assistant Attorney General Brett Shumate wrote that a recent Justice Department opinion concluded the CFPB cannot request funding while the Fed has “no profits.” Shumate cited reporting suggesting the Federal Reserve may be returning to profitability and asked Powell to confirm whether the central bank has current or anticipated earnings under the administration’s definition, Reuters reported.