A federal judge has ordered that the Trump administration must allow funding for the Consumer Financial Protection Bureau (CFPB) to continue.
The watchdog, which supporters say protects US consumers from financial harm by powerful banks, lenders and corporations, is at risk of collapsing after Donald Trump vowed to shutter it since he returned to office this year.
The agency’s acting director, Russell Vought, said that since the Federal Reserve has been operating at a loss, it is unable to fund the CFPB.
In a 32-page decision, DC district judge Amy Berman Jackson said that this novel workaround by the Trump administration to “starve” the agency of funding was “manufactured by the defendants” and based solely on an office of legal counsel memo, which said that there were no “combined earnings” available from the Fed for the CFPB – since the agency doesn’t receive its appropriations from Congress.
Earlier this year, the National Treasury Employees Union, which represents the workers at the CFPB, sued Vought, and ultimately secured an order from Jackson that stopped the administration from dismantling the consumer watchdog, and blocked mass firings. Today, she added that Vought’s argument is “not a valid justification for the agency’s unilateral decision to abandon its obligations under the injunction”.
She added that funding for the agency has continued “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”.
The US court of appeals for the DC circuit upheld Jackson’s earlier injunction and is set to hear the case on the administration’s wider attempt to dismantle the entire CFPB in February 2026. “The only new circumstance is the administration’s determination to eliminate an agency created by Congress with the stroke of pen, even while the matter is before the Court of Appeals,” Jackson wrote in today’s order, describing it as “yet another attempt to achieve the very end the Court’s injunction was put in place to prevent”.
Jackson’s ruling comes just days before the agency was set to run out of the funding necessary to pay employees. In response, Elizabeth Warren – the top Democrat on the Senate banking committee – praised Tuesday’s decision. “If courts continue to uphold the law, they’ll keep blocking Russ Vought’s illegal attempts to ‘close down’ the agency that has returned $21bn directly to Americans who were cheated by big banks and giant corporations,” she said.
The White House did not immediately respond to a request for comment, following Jackson’s decision.
