Rep. Byron Donalds, R-Fla., on his bill to eliminate the Consumer Financial Protection Bureau, Elon Musk’s directive to federal employees on documenting work, Congress’ budget reconciliation process and his political future.
A federal judge ruled Tuesday that the Trump administration is legally obligated to secure funding for the U.S. Consumer Financial Protection Bureau (CFPB), and that failure to do so would violate an earlier court order prohibiting the government from dismantling or closing the agency.
In the 32-page ruling, U.S. District Judge Amy Berman Jackson rejected the government’s claim that it was legally prohibited from funding the agency, saying the government’s rationale was “a legally baseless pretext.”
Simply because the administration is obligated to keep the agency running, it cannot claim that it is legally blocked from obtaining funding to do so, said Jackson, who explained that the refusal to secure funding was an attempt to circumvent a previous order.
The administration attempted to circumvent the original order by “actively and brazenly attempting to reopen the agency through various means,” Jackson wrote in Tuesday’s order. She referred to the March 2025 order in which she issued a preliminary injunction prohibiting the Trump administration from closing, dismantling or inactivating the agency.
TRUMP ADMIN APPEALS IN DECISION BLOCKING THE DISMANTLING OF THE CONSUMER FINANCIAL PROTECTION OFFICE
Sen. Tim Scott, R-S.C. and chair of the Senate Banking, Housing and Urban Affairs Committee, left, and Sen. Elizabeth Warren, D-Mass., and a ranking member of the Senate Banking, Housing and Urban Affairs Committee, during a hearing in Washington (Stefani Reynolds/Bloomberg via Getty Images/Getty Images)
The agency was created in 2008 by Sen. Elizabeth Warren, D-Mass., in direct response to the 2007-2008 financial crisis, which exposed major holes 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 oversees banks, lenders and large non-bank entities such as credit reporting agencies and debt collection agencies.
Activists take part in a rally outside the Consumer Financial Protection Bureau on March 24, 2025 in Washington, DC (Alex Wong/Getty Images/Getty Images)
Jackson’s ruling came at a critical time Tuesday for the agency, which is on the verge of running out of money.
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“Remarkably, however, not a single cent of the funding needed to run the agency, which has returned more than $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 headquarters, February 10, 2025, in Washington, DC (Anna Moneymaker/Getty Images)
STATE FINANCERS OPPRESS CFPB ON RULE FOR ACCESS TO THIRD PARTY FINANCIAL DATA
After coming to power in early 2025 and subsequently gaining control of the CFPB, the Trump administration halted its regular activities. Russell Vought, the agency’s acting director, ordered employees to stop all work in February 2025 and closed the headquarters. Layoff notices were sent to more than 1,000 employees in April, although the layoffs were blocked by a federal judge.
STATE FINANCERS OPPRESS CFPB ON RULE FOR ACCESS TO THIRD PARTY FINANCIAL DATA
The Consumer Financial Protection Bureau headquarters in Washington, DC, April 16, 2022. (Samuel Corum/Bloomberg via Getty Images/Getty Images)
The government’s attempts to close or dismantle the agency, including efforts to halt operations, lay off staff and cut funding, have been repeatedly blocked by the courts.
Reuters contributed to this report.
