Judge Blocks Trump Admin’s Bold Move to Starve CFPB, Stirs Showdown

Paul Riverbank, 12/31/2025Judge halts Trump effort to starve CFPB; agency’s funding—and future—remain in the crosshairs.

Presiding over the dispute was Judge Amy Berman Jackson, seasoned in such skirmishes. Her decision, delivered with little theatricality but unmistakable intent, threw cold water on the Trump administration’s latest effort to choke off funds to the CFPB. White House lawyers, pushing a theory that CFPB’s purse strings should tighten because the Federal Reserve—the agency’s unseen benefactor—was running losses, saw their logic quickly dissected. According to administration officials, “combined earnings” had dried up as a result of the Fed’s pandemic-era bond buying and subsequent, costly efforts to counter inflation. No surplus, no cash—so went the argument.

Judge Jackson’s reaction cut through the procedural fog. She labeled the administration’s rationale "unsupported and transparent," making no attempt to sugarcoat her opinion that this was yet another in a series of attempts to sideline the agency ahead of its scheduled funding review. For CFPB employees, who had watched their ranks dwindle and workloads shrink during a slow-motion campaign of attrition, her words provided some respite: paychecks, at least for now, would keep going out.

What’s remarkable about the CFPB story is not simply the legal tug-of-war, but how deeply its fate is woven into the fabric of post-crisis America. The agency was born, after all, in the shadow of widespread mortgage abuses and credit card traps, tasked with shielding everyday consumers from the less savory tactics of the financial sector. It has spent over a decade oscillating in the political winds: supporters trumpet its role in policing predatory lenders, while critics dismiss it as regulatory overreach that stifles innovation. Neither narrative fits perfectly; both speak to its contested place within the machinery of government.

Under President Trump, the CFPB’s mission has been steadily eroded. Russell Vought, performing double duty as both budget director and the agency’s acting chief, never made any secret of his ultimate aim. Staffers, stripped of meaningful projects, found themselves busy unwinding both Biden-era rules and reversals from Trump’s early term. This rare instance of bipartisan unproductivity did little to clarify the agency’s future, and CFPB’s rank-and-file faced the prospect of layoffs that had become a near-annual tradition.

Those efforts were repeatedly thrown into reverse by the courts, often at the urging of the National Treasury Employees Union, which represents hundreds of bureau workers. The tug-of-war reached a new high (or low, depending on perspective) with the administration’s "combined earnings" gambit—a legal curiosity discussed in think tanks but, until recently, untested before a judge.

It didn’t survive its debut. Judge Jackson pointedly observed that "defendants are unabashedly trying to shut the agency down again, through different means." Beyond the legal wrangling, her order brought some stability to households reliant on CFPB paychecks and perhaps, to families who benefit from its investigations into everything from phantom fees to abusive lending.

Of course, no legal decision is ever the end of the story in Washington. Congress has already trimmed the ceiling on CFPB’s appropriation, raising the likelihood that, funding or not, the agency will face fresh demands to do more with less. The central debate—how, and even whether, to bankroll a regulatory watchdog—remains unsettled, with future skirmishes all but certain.

For now, at least, the lights stay on and the work continues. Whether the next battle will hinge on legal theory, politics, or a stray line in some omnibus spending bill remains to be seen. As the dust settles, one thing seems clear: the CFPB and those charged with watching over it remain, for the moment, both protected and constantly at risk, much like the people they’re tasked to defend.

On an otherwise unremarkable Tuesday, a federal courtroom in Washington D.C. briefly became the stage for a now-familiar showdown between the White House and an agency conceived in the fallout of the 2008 financial crisis. At stake was not only the ability of the Consumer Financial Protection Bureau (CFPB) to make payroll, but the agency’s very capacity to function in uncertain political weather.Presiding over the dispute was Judge Amy Berman Jackson, seasoned in such skirmishes. Her decision, delivered with little theatricality but unmistakable intent, threw cold water on the Trump administration’s latest effort to choke off funds to the CFPB. White House lawyers, pushing a theory that CFPB’s purse strings should tighten because the Federal Reserve—the agency’s unseen benefactor—was running losses, saw their logic quickly dissected. According to administration officials, “combined earnings” had dried up as a result of the Fed’s pandemic-era bond buying and subsequent, costly efforts to counter inflation. No surplus, no cash—so went the argument.Judge Jackson’s reaction cut through the procedural fog. She labeled the administration’s rationale "unsupported and transparent," making no attempt to sugarcoat her opinion that this was yet another in a series of attempts to sideline the agency ahead of its scheduled funding review. For CFPB employees, who had watched their ranks dwindle and workloads shrink during a slow-motion campaign of attrition, her words provided some respite: paychecks, at least for now, would keep going out.What’s remarkable about the CFPB story is not simply the legal tug-of-war, but how deeply its fate is woven into the fabric of post-crisis America. The agency was born, after all, in the shadow of widespread mortgage abuses and credit card traps, tasked with shielding everyday consumers from the less savory tactics of the financial sector. It has spent over a decade oscillating in the political winds: supporters trumpet its role in policing predatory lenders, while critics dismiss it as regulatory overreach that stifles innovation. Neither narrative fits perfectly; both speak to its contested place within the machinery of government.Under President Trump, the CFPB’s mission has been steadily eroded. Russell Vought, performing double duty as both budget director and the agency’s acting chief, never made any secret of his ultimate aim. Staffers, stripped of meaningful projects, found themselves busy unwinding both Biden-era rules and reversals from Trump’s early term. This rare instance of bipartisan unproductivity did little to clarify the agency’s future, and CFPB’s rank-and-file faced the prospect of layoffs that had become a near-annual tradition.Those efforts were repeatedly thrown into reverse by the courts, often at the urging of the National Treasury Employees Union, which represents hundreds of bureau workers. The tug-of-war reached a new high (or low, depending on perspective) with the administration’s "combined earnings" gambit—a legal curiosity discussed in think tanks but, until recently, untested before a judge.It didn’t survive its debut. Judge Jackson pointedly observed that "defendants are unabashedly trying to shut the agency down again, through different means." Beyond the legal wrangling, her order brought some stability to households reliant on CFPB paychecks and perhaps, to families who benefit from its investigations into everything from phantom fees to abusive lending.Of course, no legal decision is ever the end of the story in Washington. Congress has already trimmed the ceiling on CFPB’s appropriation, raising the likelihood that, funding or not, the agency will face fresh demands to do more with less. The central debate—how, and even whether, to bankroll a regulatory watchdog—remains unsettled, with future skirmishes all but certain.For now, at least, the lights stay on and the work continues. Whether the next battle will hinge on legal theory, politics, or a stray line in some omnibus spending bill remains to be seen. As the dust settles, one thing seems clear: the CFPB and those charged with watching over it remain, for the moment, both protected and constantly at risk, much like the people they’re tasked to defend.