WASHINGTON, Dec 30 (Reuters) – A federal judge on Tuesday rejected a claim by President Donald Trump’s administration that it is legally barred from securing funding for the U.S. Consumer Financial Protection Bureau, noting that a court order already bars the administration from shutting the agency down.
The ruling from U.S. District Judge Amy Berman Jackson came as the CFPB faced the imminent exhaustion of funds. The Trump administration has denied the CFPB additional cash to meet expenses since taking control of the agency in February but it has been repeatedly blocked in the courts from firing workers en masse.
CFPB representatives did not immediately respond to a request for comment.
Officials say cash on hand could be exhausted in early 2026 and the CFPB announced last month that an administration legal opinion held that, under the agency’s governing statute, it could not seek additional funding from the Federal Reserve so long as the central bank is losing money.
But in a stinging 32-page ruling, Berman Jackson said Tuesday this was a legally baseless pretext to get around her original order, finding that “the defendants are unabashedly trying to shut the agency down again, through different means.”
“It appears that defendants’ new understanding of ‘combined earnings’ is an unsupported and transparent attempt to achieve the very end the court’s injunction was put in place to prevent,” Berman Jackson wrote, adding that the administration’s “unilateral decision” to decline further CFPB funding would therefore be in violation.
The agency’s supporters say that without it the public will be more exposed to predatory lending practices, scams and other abuse. Trump and others have accused it of politicized enforcement and called it a burden on free enterprise.
The agency was started to protect financial services consumers after the financial crisis of 2008.
Unlike many federal agencies, the CFPB is funded by the Federal Reserve, rather than through a budget set annually by Congress. But lawmakers this year slashed the CFPB’s maximum allowable funding, meaning the agency may face tighter funding constraints regardless.
(Reporting by Douglas Gillison in Washington; Editing by David Gregorio)
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