Rep. Byron Donalds, R-Fla., on his bill to eliminate the Consumer Financial Protection Bureau, Elon Musk’s directive to federal workers over documenting work, Congress’ budget reconciliation process and his political future.
A federal judge ruled on Tuesday that the Trump administration is legally required to secure funding for the U.S. Consumer Financial Protection Bureau (CFPB), and that failing to do so would violate a prior court order barring the government from dismantling or shutting down the agency.
In the 32-page ruling, U.S. District Judge Amy Berman Jackson rejected the administration’s claim that it was legally barred from funding the agency, saying the administration’s rationale was “a legally baseless pretext.”
Simply, given that the administration is required to keep the agency operating, it cannot claim it is legally blocked from securing funding to do so, according to Jackson, who explained that refusal to secure funding was an attempt to circumvent an earlier order.
The administration was trying to get around the original order by “actively and unabashedly trying to shut the agency down again, through different means,” Jackson wrote in Tuesday’s order. She was referring to the March 2025 order in which she issued a preliminary injunction that barred the Trump administration from shutting down, dismantling or disabling the agency.
TRUMP ADMIN APPEALS DECISION BLOCKING DISMANTLING OF CONSUMER FINANCIAL PROTECTION BUREAU
Senator Tim Scott, a Republican from South Carolina and chairman of the Senate Banking, Housing, and Urban Affairs Committee, left, and Senator Elizabeth Warren, a Democrat from Massachusetts and ranking member of the Senate Banking, Housing, and Urb (Stefani Reynolds/Bloomberg via Getty Images / Getty Images)
The agency was created in 2008 by Senator Elizabeth Warren (D-MA), in direct response to the 2007–2008 financial crisis, which exposed major gaps in how the U.S. government protected consumers from risky and abusive financial practices. The agency helps consumers by providing educational materials and accepting complaints, and takes action against companies that break the law. It supervises banks, lenders and large non-bank entities such as credit reporting agencies and debt collection companies.
Activists participate in a rally outside the Consumer Financial Protection Bureau (CFPB) on March 24, 2025 in Washington, DC. (Alex Wong/Getty Images / Getty Images)
Jackson’s Tuesday ruling came at a critical time for the agency, which is on the brink of running out of funds.
“Notably, though, not one penny of the funding needed to run the agency that has returned over $21 billion to American consumers comes from taxpayer dollars,” Jackson wrote. “Today, the agency is hanging by a thread.”
The entrance to the Consumer Financial Protection Bureau (CFPB) headquarters is on February 10, 2025, in Washington, D.C. (Anna Moneymaker/Getty Images)
STATE TREASURERS PUSH CFPB ON THIRD-PARTY FINANCIAL DATA ACCESS RULE
After taking office in early 2025 and subsequently gaining control of the CFPB, the Trump Administration halted its regular operations. Russell Vought as the acting director of the agency, ordered employees to stop all work in February 2025, and closed the headquarters. In April, layoff notices were issued to more than 1,000 workers, though the layoffs have been blocked by a federal judge.
STATE TREASURERS PUSH CFPB ON THIRD-PARTY FINANCIAL DATA ACCESS RULE
The Consumer Financial Protection Bureau (CFPB) headquarters in Washington, D.C., U.S., on Saturday, April 16, 2022. (Samuel Corum/Bloomberg via Getty Images / Getty Images)
The administration’s efforts to shut down or dismantle the agency, including attempts to halt operations, lay off staff, and allow funding to lapse, have repeatedly been blocked by the courts.
FOX Business reached out to the CFPB and the White House for comment.
Reuters contributed to this report.