Federal judge orders Trump administration to seek money for CFPB

A federal judge on Tuesday ruled against the Trump administration as it seeks to shut down the Consumer Financial Protection Bureau (CFPB) by refusing to fund it. The judge ordered the administration to continue to seek funding for the bureau, which was created by Congress but is funded through the Federal Reserve.

The Trump administration had argued that because the Federal Reserve is operating at a loss, it does not have the money to fund the bureau’s operation. Judge Amy Berman Jackson, who had ruled agains the administration’s attempts to close the bureau in March, wrote in her Tuesday decision that the administration’s latest funding argument “is an unsupported and transparent attempt to achieve the very end the court’s injunction was put in place to prevent.”

The decision is just the latest in a battle over the bureau’s existence. Soon after taking office, Trump fired CFPB Director Rohit Chopra and set Elon Musk’s DOGE team on the agency. In April, the bureau, now under the leadership of White House Budget Director Russell Vought, fired 90% of the staff. However, every administration move has been met by litigation and the bureau’s staff, operations and budget have been in limbo as the lawsuits have worked their way through the courts.

The latest ruling comes as the CFPB faces an imminent budget shortfall as the year ends. In November, the bureau filed a notice informing the court in NTEU v. Vought that “the Department of Justice’s Office of Legal Counsel (OLC) has determined that the Bureau may not legally request funds at this time from the Federal Reserve under Dodd-Frank. OLC made this conclusion on the basis that the Federal Reserve System currently lacks any ‘combined earnings’ from which the Bureau may draw funding, as required by Dodd-Frank. OLC opinions are binding upon Executive Branch agencies including the Bureau.”

Judge Berman rejected that reasoning and ordered the administration to continue to find funding for the bureau.

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