The Vought Decision Salvaged CFPB Funding by Skirting Loper Bright
Judge Amy Berman Jackson recently ruled against CFPB Director Russell Vought in an important funding dispute, National Treasury Employees Union v. Vought. Without saying so, her opinion deferred to the funding-statute interpretation championed by previous CFPB director Rohit Chopra. This stealth deference not only flouted Loper Bright’s mandate to exercise independent judgment, it exceeded even the latitude permitted in the heyday of Chevron.
This error in method paved the way for an error in outcome: confusing a bank’s profit with its gross revenue. The question in the case was the meaning of “earnings” in the statute that authorizes CFPB funding from the Fed’s “combined earnings.” Deferring to former Director Chopra’s self-serving reading, Judge Jackson ruled that “earnings” refers to revenue. This meant that the Federal Reserve System has “earnings”—and can continue to fund the CFPB—even when the Fed is losing billions of dollars. The D.C. Circuit should reverse this opinion, which in any event other courts should not follow. See National Treasury Employees Union v. Vought, No. 25-0381, 2025 WL 377192 (D.D.C. Dec. 30, 2025).
The statute funds the CFPB out of the Federal Reserve Systems’ “earnings.”
When Congress created the Consumer Financial Protection Bureau in 2010, it insulated the new agency from annual appropriations by funding it “from the combined earnings of the Federal Reserve System.” 12 U.S.C. § 5497(a)(1). This provision worked well for its first decade, because every year the 12 Federal Reserve Banks that constitute the Federal Reserve System generated net income.
That changed in 2022, when rising interest rates pushed the Fed into its first-ever operating loss. In response, and also for the first time ever, the CFPB under Director Chopra asserted that “earnings” refers to revenue rather than profit. This reading kept the funding flowing even though the Fed was losing money.
When a new administration took office in 2025, it took a fresh look at the statute and concluded that “earnings” refers to profits. Because the Fed still was operating at a loss, this meant it did not have funds to send the CFPB.
By then, the CFPB was operating under an injunction issued by Judge Jackson, basically requiring Director Vought to maintain the status quo. Because of the injunction, Judge Jackson addressed the meaning of “earnings.” After concluding it means revenue, id. at *11-*16, she ordered Director Vought to continue requesting Fed funding, id. at*17.
The court gave shadow deference to the past CFPB interpretation.
Judge Jackson’s opinion began, not by analyzing the statute’s text, but by recounting the CFPB’s previous position on its meaning. Id. at *2. It emphasized that the Chopra CFPB had interpreted earnings to mean revenue, and had been “adamant” about it. Id. at *12. Although Director Chopra had not advanced that reading until late 2022, the court described the interpretation as “longstanding” and “consistent.” Id. at *2, *3. In the same vein, the court wrote that the CFPB’s annual funding process “ha[d] unfolded seamlessly since the Bureau was established in 2011, even in the years since 2022 when the Federal Reserve’s interest expenses have exceeded its earnings.” Id. at *17 (emphasis added).
In contrast, the court branded the Vought interpretation as disruptive, casting it as “a sharp departure” from the previous interpretation, id. at *2, “contrary to historical practice,” id. at *10, and “entirely inconsistent with the way the Dodd-Frank Act has been consistently interpreted by all the parties involved.” id. at *12 (emphasis added). The court faulted the new administration for advancing a “new understanding” of the term. Id. at *17 (emphasis added).
The court also relied on statements from outside the CFPB, citing testimony from Fed Chair Jerome Powell and a report from the Congressional Budget Office, id. at *12. In fact, neither of those sources construed “earnings” to mean revenue (and Chair Powell testified that the Fed cannot say “no” to the CFPB), but the court still invoked them as support.
The court did not say any of these positions were persuasive on the merits. Which makes sense, since the court’s historical survey was not an exercise in statutory interpretation—it was an exercise in framing. It defined the issue in the case as whether the new Director could disrupt a presumptively settled reading of the statute. This framing established a strong presumption that the new Director could not change the course set by his predecessor.
That framing propped up weak textual analysis.
The court then turned to statutory analysis, revealing why the initial framing was important: because the textual arguments were too flimsy to stand on their own. Id. at *12–*16. The discussion of “ordinary meaning” proves the point. Even though the statute refers to the “combined earnings” of the Fed’s regional operating banks, the court led with a definition of “earnings” referring to an individual’s wages. Id. at *13. It rejected as too “technical” the definitions applicable to operating entities such as banks. Id. By equating major banks’ operating results with someone’s paycheck, the court made a basic category error.
The court’s analyses of context and purpose were no better. The court did show that the specific calculation of an entity’s earnings can vary by context, id. at *14-*16, but it did not show that “earnings” ever refers to an entity’s revenue. Yet the court’s concluded that its textual analysis confirmed its presumptive conclusion that “earnings” refers to the Fed’s revenue. Id. at *15-*16.
The court’s approach conflicts with Loper Bright—and gives more deference than Chevron would permit.
The court’s approach conflicts with the Supreme Court’s instruction in Loper Bright Enterprises v. Raimondo to exercise “independent judgment” by interpreting statutes without deference to agency interpretations. 603 U.S. 369, 412 (2024). The Vought court did not exercise independent judgment; it used historical background to give the Chopra reading all-but-decisive force. The court framed the entire case using that interpretation. It characterized that short-lived and self-serving position as “longstanding,” while discrediting the Vought CFPB for conducting its own analysis when it took office.
It is true that under Loper Bright an agency’s interpretations still can be persuasive—but only if it is persuasive on the merits. Id. at 389, 394. Which the Chopra-era interpretation was not: It was not contemporaneous with the statute’s enactment. It was not the product of formal rulemaking, and it did not rest on technical expertise or factual determinations within the agency’s domain. The Vought court never mentioned the Chopra CFPB’s rationale, much less suggested it was persuasive.
The court appeared to nod toward Loper Bright ’s statement that agency “interpretations issued contemporaneously with the statute at issue, and which have remained consistent over time,” 603 U.S. at 394. But the court misconstrued that requirement, given that Director Chopra’s “revenue” theory didn’t surface until 12 years after enactment, then lasted little more than two years.
Yet the court gave deference that even Chevron would not have permitted. Chevron required ambiguity before deference, but here the court found none. In fact, it used stealth deference to help show the statute was not ambiguous. The court also exceeded Chevron’s limitations by giving weight to the CFPB’s position on a question where the CFPB had no expertise and where that position was not the product of a formal agency process.
Equally striking, the court gave this presumptive weight to the previous administration’s interpretation, using it to help defeat the current one. That approach makes no sense, because even if the CFPB did have expertise in interpreting this provision (which it does not), the previous CFPB regime would have had no greater expertise than the current one.
The same defects mark the court’s citations to the Powell testimony and CBO Report. They did not reflect any agency expertise and were not the product of any formal agency process. The court did not suggest they were persuasive on the merits.
Conclusion
Vought is on appeal in the DC Circuit, but the court is unlikely to reach the meaning of “earnings” in the funding statute. The issue also is teed up in complaints recently filed against the CFPB in California and Oregon. Those courts should avoid the temptation to put a stealth but heavy thumb on the judicial scales. They should instead exercise independent judgment and recognize that “earnings” in this context means net income—the only definition that fits the Federal Reserve’s banking operations.
