WASHINGTON, March 13 (Reuters) – A federal judge on Friday ordered the Trump administration to continue funding the U.S. Consumer Financial Protection Bureau indefinitely, saying top officials illegally relied on flawed legal advice to justify their refusal to do so.
The ruling by U.S. District Judge Edward Davila of the Northern District of California marked another court rebuke of President Donald Trump’s handling of CFPB funds, which he said should be dismantled. A judge in Washington reached a similar conclusion last December.
Representatives for the CFPB did not immediately respond to a request for comment. The work of consumer watchdogs includes tackling financial practices such as predatory lending, overcharging and counting medical debt into personal credit scores.
The government all but canceled the agency’s activities in its early years, trying to lay off its employees en masse.
In 2025, the Trump administration declined to fund the agency. In November, the Fed said legal guidance prohibited it from using money withdrawn from the Fed to fund the CFPB, as designed by Congress, because the central bank was losing money.
In his ruling, Judge Davila found that acting CFPB Director Russell Vought sought legal advice from the Justice Department as part of a “transparency attempt” to shut down the CFPB relying on misinterpretations of the Fed’s finances and laws — the ultimate circumvention of Congress’ intent to protect the CFPB “from such transparent partisanship.”
Davila also said that while the CFPB is subject to a preliminary injunction in a separate case, Friday’s ruling is intended to ensure that the CFPB can receive funding indefinitely.
Vought, who also serves as Trump’s budget director, requested $145 million from the Fed in January to cover the CFPB’s costs for a fiscal quarter, according to a court order, but noted that he did so amid protests.
Senior officials have accused the CFPB of politicizing enforcement and burdening free enterprise, a charge the agency’s supporters and staff deny. They argue that the dismantling of the CFPB amounts to a giveaway to politically connected donors and entrepreneurs.
The lawsuit was filed by a consumer rights group in San Jose, California.
(Reporting by Douglas Gillison in Washington; Editing by Chizu Noyama and Cynthia Osterman)
