Federal Judge Orders Trump Administration to Fund Consumer Financial Protection Bureau

On December 30, 2025, U.S. District Judge Amy Berman Jackson ruled that the Trump administration must continue to provide funding for the Consumer Financial Protection Bureau (CFPB), rejecting the administration's claim that it was legally barred from securing necessary funds. The ruling comes as the CFPB faces imminent financial exhaustion, with officials warning that it could run out of funds by early 2026. Judge Jackson emphasized that the administration's attempts to cut off funding were a violation of an existing court order designed to protect the agency from being dismantled.

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The CFPB was established in the aftermath of the 2008 financial crisis to oversee financial services and protect consumers from predatory practices. Since President Donald Trump took office, the agency has been a target for conservatives, with Trump promising to abolish it during his campaign. The administration's efforts to defund the CFPB intensified after it took control of the agency in February 2025, leading to a series of legal battles over its funding and operational authority.

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The Trump administration argued that a new interpretation from the Justice Department's Office of Legal Counsel limited the CFPB's ability to request funds from the Federal Reserve, claiming that the Fed's financial losses precluded the agency from accessing necessary resources. However, Judge Jackson found this reasoning to be a "manufactured" justification for the administration's unilateral decision to abandon its obligations under the court's injunction. She stated that the agency must continue to request funding from the Fed, regardless of its financial status, to fulfill its statutory duties.

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In her ruling, Judge Jackson noted that "neither the statute, the injunction, nor the Fed’s willingness to pay has changed." She criticized the administration's approach, asserting that it was an attempt to eliminate an agency created by Congress. The CFPB's supporters argue that without adequate funding, consumers would be more vulnerable to financial exploitation.

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Critics of the Trump administration's actions, including consumer advocacy groups and the National Treasury Employees Union, have expressed concern that the administration's efforts to defund the CFPB would undermine consumer protections. They argue that the agency plays a crucial role in regulating financial institutions and addressing consumer complaints.

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The D.C. Circuit Court of Appeals is set to hear an ongoing lawsuit regarding the CFPB's funding in February 2026. The outcome of this case could have significant implications for the agency's future and its ability to operate effectively.

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• “the defendants are unabashedly trying to shut the agency down again, through different means.” — Amy Berman Jackson, U.S. District Judge

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• “(T)he only new circumstance is the administration’s determination to eliminate an agency created by Congress with the stroke of pen, even while the matter is before the Court of Appeals.” — Amy Berman Jackson, U.S. District Judge

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• “This candid statement does not mark a change in the Acting Director’s approach; he said as much on his first day on the job, and it would be foolhardy not to take Russell Vought at his word this time,” — Amy Berman Jackson, U.S. District Judge

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This ruling underscores the ongoing legal and political battles surrounding the CFPB and highlights the complexities of funding mechanisms for federal agencies.

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