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67 September 2025 J O U R N A L themortgagepoint.com September 2025 » In the report, Paoletta claims that the letter is a reaction to a June corre- spondence from the GAO in which the congressional watchdog "weaponiz[ed]" the Impoundment Control Act of 1974 "for political purposes." Due to many attempts to terminate the great majority of the CFPB's employ- ees, Senate Democrats have requested that the GAO look into the agency. Vought requested Federal Reserve Chair Jerome Powell to refuse any more "unappropriated" funds on his first full day in command of the bureau. He also shared the letter on social media. "CFPB will not be taking its next draw … because it is not 'reasonably necessary' to carry out its duties," Vought wrote in an X post. "The Bureau's current balance of $711.6 million is, in fact, excessive in the current fiscal environment. This spigot, long contributing to CFPB's unaccount- ability, is now being turned off." In contrast to Vought's letter to Powell, Paoletta accused the GAO of adopting the social media post as its "sole predicate." Paoletta stated that neither the post nor the CFPB's actions after it "could conceivably be construed as an illegal withholding of funds under the ICA." A different conclusion would "create an arti- ficial funding floor where only a statutory ceiling exists, in addition to eviscerating the CFPB Director's discretionary au- thority to determine the amounts needed during the fiscal year to carry out Bureau operations." The Fed provides funding to the CFPB, a practice that gave rise to a well-followed court dispute. The funding arrangement was affirmed as constitu- tional by the Supreme Court last year. That strengthens Paoletta's case, but in his letter to the GAO, the CFPB's legal head called the congressionally created mecha- nism "reckless and irresponsible." Examining correspondence between the CFPB and GAO in the context of time is crucial, according to the report. Two weeks after the city of Baltimore voluntarily dropped its lawsuit against the CFPB, the GAO sent out its letter in June. There is no ability to "transfer away money from, or otherwise relinquish control" over funds in the CFPB's reserve fund, according to statements submitted by agency representatives in court. Recent Approval of Bill Restricts CFPB Funding However, the "One Big, Beautiful Bill," which was passed by Congress between June and the present, limits the CFPB's funding at 6.5% of the Fed's operating budget, down from 12%. "Congress expressly affirmed the Acting Director's determination that the Bureau's funding level was 'excessive' when it reduced the cap on the Director's discretionary request authority by nearly half," Paoletta wrote to the GAO. "Your boss—Congress—has thus enshrined its agreement with the Acting Director's efforts to right-size the Bureau into law." Paoletta also claimed that the GAO's claim that the CFPB is breaking the ICA "undermine[s] both President [Donald] Trump and Congress," copying Senate Majority Leader John Thune, R-SD, and House Speaker Mike Johnson, R-LA, on the previous letter. The GAO's June letter is "not only in opposition to Congress's attempt to scale down an out-of-control agency, but also in opposition to Acting Director Vought's commendable attempts to implement President Trump's historic reform efforts," Paoletta wrote. The financing for the CFPB does not run out at the end of a fiscal year, Paoletta pointed out. Instead, he stated that any money that is not spent "remains available to CFPB for obligation in future fiscal years." According to Paoletta, Vought "acted well within his legal authorities in declin- "The Fair Housing Act mandates that HUD investigate all jurisdictional complaints and determine whether reasonable cause exists. Ignoring this duty undermines HUD's obligation to affirmatively further fair housing and violates the statute's core purpose."