A federal judge orders the Trump administration to seek funding for the CFPB

The Trump administration had argued that because the Federal Reserve operates at a loss, it does not have the money to fund the agency’s operations. Judge Amy Berman Jackson, who had ruled against the government’s efforts to close the agency in March, wrote in her Tuesday decision that the government’s latest funding argument is “an unsupported and transparent attempt to achieve the very purpose the injunction was intended to prevent.”

The decision is just the latest in a battle for the agency’s existence. Shortly after taking office, Trump fired CFPB Director Rohit Chopra and appointed Elon Musk’s DOGE team to the agency. In April, the agency, now led by White House budget director Russell Vought, laid off 90% of its staff. However, the administration’s every move was accompanied by lawsuits, and the agency’s staff, operations, and budget were in limbo as the lawsuits wound their way through the courts.

The latest ruling comes as the CFPB faces a looming budget deficit at the end of the year. In November, the agency a report submitted informing the court NTEU vs. Vought that “the Department of Justice’s Office of Legal Counsel (OLC) has determined that the Bureau may not currently legally solicit funds from the Federal Reserve under Dodd-Frank. OLC has reached this conclusion based on the fact that the Federal Reserve System currently lacks ‘combined revenues’ from which the Bureau can draw funding, as required by Dodd-Frank. OLC opinions are binding on agencies of the Executive Branch, including the Bureau.”

Judge Berman rejected that reasoning and ordered the administration to continue seeking funding for the agency.