A federal judge has ordered the Trump administration to continue funding the U.S. Consumer Financial Protection Bureau, despite efforts to shut it down.
Story Highlights
- Judge Amy Berman Jackson ruled against the administration’s funding halt.
- The CFPB faces a potential funding crisis by early 2026.
- The administration’s reasoning was deemed a baseless pretext.
- The CFPB was created to protect consumers post-2008 financial crisis.
Judge Blocks Funding Halt
On December 30, 2025, U.S. District Judge Amy Berman Jackson ruled that the Trump administration must continue funding the U.S. Consumer Financial Protection Bureau (CFPB).
The administration claimed it was legally barred from securing funds, but the judge noted an existing court order preventing its shutdown. This decision came as the CFPB faced the imminent exhaustion of its funds.
Failure to fund consumer watchdog will violate court order, judge rules https://t.co/9XTugRyrW3
— The Hill (@thehill) December 30, 2025
The administration has been blocking additional cash flow to the CFPB since February. Despite attempts to curtail the agency’s operations, courts have repeatedly prevented mass firings of its workforce.
The ongoing legal battles reflect a broader struggle over the agency’s future, as it grapples with financial constraints imposed by recent legislative changes.
Legal Pretext Rejected
Judge Berman Jackson criticized the administration’s justification as a “legally baseless pretext” to circumvent her original order. The administration’s unilateral decision to decline further funding was in violation of the court’s injunction. Supporters of the CFPB argue that the absence of the agency would leave the public vulnerable to predatory lending and financial scams.
Established in response to the 2008 financial crisis, the CFPB serves to protect consumers in the financial services sector. Its unique funding structure, sourced from the Federal Reserve rather than Congress, has historically insulated it from political pressures. However, recent budget cuts threaten its operational capacity, regardless of this ruling.
Impact on Consumer Protection
Without the CFPB, consumers could face increased risks from unethical financial practices. The agency has been accused by some, including President Trump, of politicized enforcement actions that burden free enterprise. Nevertheless, its role in safeguarding consumer rights remains a pivotal aspect of its mission.
The debate over the CFPB’s funding and existence underscores a fundamental conflict between government oversight and free-market principles. As the agency navigates uncertain funding futures, the broader implications for consumer protection and regulatory frameworks remain in the spotlight.
