Judge says Trump administration must continue funding consumer watchdog | Trump administration
A federal judge has ordered that the Trump administration allow continued funding of the Consumer Financial Protection Bureau (CFPB).
The watchdog, which supporters say protects U.S. consumers from financial harm caused by powerful banks, lenders and corporations, faces collapse after Donald Trump promised to shut it down since returning to power this year.
The agency’s acting director, Russell Vought, said that because the Federal Reserve was operating at a loss, it was unable to fund the CFPB.
In a 32-page ruling, D.C. District Judge Amy Berman Jackson said the Trump administration’s new workaround to “deprive” the agency of funding was “fabricated by defendants” and based solely on a memo from the Office of Legal Counsel, which said there were no “combined benefits” available from the Fed to the CFPB — since the agency does not receive its appropriations from Congress.
Earlier this year, the National Treasury Employees Union, which represents CFPB workers, sued Vought and ultimately won an order from Jackson that blocked the administration from dismantling the consumer watchdog and blocked mass layoffs. 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 office’s creation in 2011, “even since 2022, when the Federal Reserve’s interest expenses exceeded its revenues.”
The U.S. Court of Appeals for the D.C. Circuit upheld Jackson’s earlier injunction and is expected to hear the case on the administration’s broader attempt to dismantle the entire CFPB in February 2026. “The only new circumstance is the Administration’s determination to eliminate with the stroke of a pen an agency created by Congress, even though the case is before the Court of Appeals,” Jackson wrote in today’s order, describing it as “yet another attempt to achieve the ultimate goal of the Court’s injunction was put in place to prevent.
Jackson’s decision comes just days before the agency runs out of funds needed to pay its employees. In response, Elizabeth Warren – the top Democrat on the Senate Banking Committee – praised Tuesday’s decision. “If the courts continue to uphold the law, they will continue to block Russ Vought’s illegal attempts to ‘shut down’ the agency that returned $21 billion directly to Americans 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.
