The CFPB was set to run out of funds within the next month, Politico reported Tuesday.
Russ Vought, who is the director of the Office of Management and Budget (OMB) and acting director of the CFPB, and the Trump administration have argued that it would be against the CFPB’s founding rules to request funds from the Federal Reserve, because the Fed had not been running at a profit, according to the report.
The Tuesday ruling by the U.S. District Court for the District of Columbia clarified an earlier injunction that required the Trump administration to stop trying to close the CFPB while a case brought against Vought by the union representing CFPB employees, the National Treasury Employees Union, was ongoing, the report said.
The Federal Reserve began running at a profit in December, for the first time since 2022, and the judge said that the Fed provided funding to the CFPB during the years in which it did not turn a profit, per the report.
CNBC reported Tuesday that in her ruling, U.S. District Judge Amy Berman Jackson said the administration’s argument that CFPB could not seek additional funding from the Fed was a pretext to circumvent her original order that bars the administration from shutting down the agency.
“It appears that defendants’ new understanding of ‘combined earnings’ is an unsupported and transparent attempt to achieve the very end the court’s injunction was put in place to prevent,” Berman Jackson wrote in her ruling, per the report.
PYMNTS reported Monday (Dec. 29) that as the CFPB faces an uncertain environment heading into the new year, the regulator has reprioritized the matters it pursues. While the CFPB’s rulemaking has narrowed, it remains in play.
Another lawsuit centering on the CFPB was announced Dec. 22. In that suit, 21 states and the District of Columbia sued the Trump administration in an effort to stop what they said is illegal defunding of the CFPB.
