A federal judge on Tuesday ruled that the Consumer Financial Protection Bureau cannot lapse its funding, a blow to the Trump administration which had declared its cash stream illegal.
In her motion, Judge Amy Berman Jackson of the Federal District Court in Washington wrote that the C.F.P.B. can continue to receive funding from the Federal Reserve, despite the fact that the Fed has been operating at a loss since 2022.
The Fed’s willingness to pay has not changed, she wrote, adding that “the only new circumstance is the administration’s determination to eliminate an agency created by Congress with the stroke of pen.”
The future of the C.F.P.B. has been in question since Russell T. Vought, the White House budget director who also serves as the consumer bureau’s acting director, began to dismantle the bureau in February. In a notice last month, the consumer bureau described its own supervision department as “the weaponized arm” of the agency under its Biden-era director.
Mr. Vought had ordered the agency to close its offices and did not request any funding from the Fed. That eventually left the agency unable to pay its roughly 1,400 workers.
“We want to put it out — and we will be successful probably within the next two, three months,” Mr. Vought said on “The Charlie Kirk Show” podcast in October.
Last month, the Justice Department’s Office of Legal Counsel sent a memo to Mr. Vought declaring the agency’s funding stream illegal. The administration argued that because the Fed has been operating at a loss, there is no money for the C.F.P.B. The bureau warned that it would run out of money in early 2026. A 2010 law that created the bureau ordered that it would receive funding from the Fed. Lawmakers intended that funding structure to protect the agency from partisan politics.
The C.F.P.B. has requested, and been granted, more than $1 billion from the Fed since 2022, but Mr. Vought has refused to request any funding this year.
The Trump administration has sought to have greater sway over independent financial regulators, and his appointees have cut staffing and limited bank examinations. Mr. Vought stopped nearly all new work at the bureau after he took his position in February. Bank examiners have been told to close out open matters and are barred from beginning new ones.
Mr. Vought’s changes to the agency this year have caused backlash from some of its employees. In November, after the bureau announced that it would require its financial examiners to recite a “humility pledge” to companies before beginning a review, the consumer bureau’s staff union responded with a statement that called the pledge “creepy” and “disrespectful.”
The C.F.P.B.’s examiners have forced banks and other lenders to return hundreds of millions of dollars to consumers, and helped uncover large industry issues since the agency began its operations in 2011.
Emmett Lindner is a business reporter for The Times.
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