Judge Rules Trump Administration Unlawfully Refused To Request CFPB Funding

A federal judge has held that the Trump administration acted unlawfully when it claimed last year that it could not request more funding for the CFPB and declined to do so.

What the judge decided

• U.S. District Judge Edward Davila ruled that the administration’s position that it was legally barred from requesting funds for the CFPB was incorrect under the Dodd-Frank Act.

• He ordered acting CFPB Director Russ Vought to continue requesting “necessary” funding from the Federal Reserve so the Bureau can carry out its statutory duties.

The legal theory on funding

• The administration relied on a DOJ Office of Legal Counsel view that the Fed’s lack of “combined earnings” (interpreted as net profits) meant there was no lawful source of CFPB funding.

• Davila rejected that interpretation, saying the director has no authority to redefine the Fed’s “combined earnings” and cannot use that theory to justify not seeking funds.

Relationship to earlier orders

• This is not the first time a court has intervened: a December 30, 2025 D.C. District Court ruling in NTEU v. Vought held that refusal to request funds violated an earlier preliminary injunction requiring the CFPB to keep operating.

• Earlier in January 2026, another judge ordered the administration to continue seeking funding, which led Vought to submit a $145 million request to the Fed to keep the CFPB running through March.

Why it matters for the CFPB

• The rulings collectively block an attempted “defunding by interpretation,” where declining to request funding would have forced the Bureau to shut down as its remaining balances ran out in early 2026.

• They reinforce that, unless and until Congress changes the statute, the CFPB director must use the existing Fed-based funding mechanism and cannot unilaterally create a funding lapse.