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Rep. Byron Donalds, R-Fla., on his bill to eliminate the Consumer Financial Protection Bureau, Elon Musk’s directive to federal workers on labor documentation, Congress’s budget reconciliation process and his political future.
A federal judge ruled Tuesday that the Trump administration is legally required to provide funding to the U.S. Consumer Financial Protection Bureau (CFPB), and that failure to do so would violate a previous court order barring the government from dismantling or closing 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 justification was “a legally baseless pretext.”
Simply, because the administration is required to keep the agency operating, it cannot claim that it is legally prevented from obtaining funds to do so, according to Jackson, who explained that the refusal to obtain funds was an attempt to circumvent a previous order.
The administration was trying to circumvent the original order by “actively and shamelessly trying to shut down the agency again, through various means,” Jackson wrote in Tuesday’s order. She was referring to the March 2025 order in which she issued a preliminary injunction barring the Trump administration from closing, dismantling or deactivating the agency.
TRUMP ADMINISTRATOR APPEALS DECISION BLOCKING DISTANTMENT OF CONSUMER FINANCIAL PROTECTION BUREAU
Sen. Tim Scott, R-S.C. and chairman of the Senate Banking, Housing and Urban Affairs Committee, left, and Sen. Elizabeth Warren, D-Mass., and ranking member of the Senate Banking, Housing and Urban Affairs Committee, at 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 Financial crisis of 2007-2008, 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 violate 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 in front of the Consumer Financial Protection Bureau on March 24, 2025 in Washington, DC. (Alex Wong/Getty Images/Getty Images)
Jackson’s decision Tuesday came at a critical time for the agency, which is on the verge of running out of funds.
FEDERAL WORKERS UNION SUITS TO STOP VOUGHT AND DOGE ACTIVITY AT CONSUMER FINANCIAL PROTECTION OFFICE
“However, it should be noted that not a single cent of the funding necessary to operate 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 on February 10, 2025, in Washington, DC (Anna Moneymaker/Getty Images)
STATE TREASURERS PUSH CFPB ON THIRD-PARTY FINANCIAL DATA ACCESS RULE
After taking office in early 2025 and subsequently taking control of the CFPB, the Trump administration halted its regular operations. Russell Vought, the agency’s acting director, 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, although those layoffs were blocked by a federal judge.
STATE TREASURERS PUSH CFPB ON THIRD-PARTY FINANCIAL DATA ACCESS RULE
The Consumer Financial Protection Bureau headquarters in Washington, DC on April 16, 2022. (Samuel Corm/Bloomberg via Getty Images / Getty Images)
The administration’s efforts to close or dismantle the agency, including attempts to shut down operations, lay off staff and let funding expire, have been repeatedly blocked by the courts.
FOX Business has reached out to the CFPB and the White House for comment.
Reuters contributed to this report.
