The Trump administration must continue to seek funding for the Consumer Financial Protection Bureau, a federal judge ruled last week.
The CFPB is unique among federal agencies in that its funding comes directly from the Federal Reserve based on a request from the bureau’s director. Last year, CFPB acting Director Russell Vought announced plans for a reduction in force affecting a large number of bureau employees and said he would not ask the Fed for the agency’s next appropriation. As a result, the bureau is expected to run out of funding early this year. The union representing CFPB employees has filed a lawsuit in federal court alleging the Trump administration is illegally seeking to shut down the bureau.
The administration argues the CFPB can only receive funds from the Fed if the latter makes a profit. But in an order, U.S. District Court Judge Amy Berman Jackson said the method the administration used to make that determination is inconsistent with statute and is “an unsupported and transparent attempt to starve the CFPB of funding.”
“Neither the statute, the injunction, nor the Fed’s willingness to pay has changed; the only new circumstance is the administration’s determination to eliminate an agency created by Congress with the stroke of pen,” Berman wrote.
