May 12, 2026, Ballard Spahr, CFPB Surprisingly Appeals Judge Davila’s Funding Decision to the Ninth Circuit
As previously discussed in our blog, Judge Davila ruled that Acting Director Russell Vought acted unlawfully when he concluded that the CFPB could no longer request transfers from the Federal Reserve because the Federal Reserve System allegedly lacked “combined earnings” within the meaning of Section 1017 of the Consumer Financial Protection Act. Judge Davila held that “combined earnings” means combined revenues (and not combined profits) of the Federal Reserve Banks.
The lawsuit was brought by Rise Economy, the National Community Reinvestment Coalition, and the Woodstock Institute. Judge Davila granted summary judgment in favor of the plaintiffs and held that the CFPB’s interpretation of “combined earnings” was arbitrary, capricious, and contrary to law under the Administrative Procedure Act. He ordered the CFPB to continue requesting from the Federal Reserve the funds “reasonably necessary” to carry out its statutory responsibilities. Judge Davila imposed no limit on the duration of the order.
