CFPB Gets $145M Lifeline as Trump Admin Bows to Court
Isaac BennettCompelled by a federal judge, the Trump administration reversed its CFPB defunding efforts, requesting $145M from the Fed for the consumer watchdog, marking a significant policy setback.
The Trump administration has reversed course on its 11-month effort to defund the Consumer Financial Protection Bureau (CFPB), requesting $145 million from the Federal Reserve to keep the consumer watchdog agency solvent. The move, disclosed in a court filing, comes after a federal judge mandated the funding.
The seal of the Consumer Financial Protection Bureau (CFPB), the agency at the center of a prolonged funding dispute with the Trump administration.
Court Order Forces Reversal on Funding
According to a letter filed in federal court, President Trump's budget director, Russell Vought, has formally requested the funds from the Federal Reserve. This action follows a court decision a month ago that rejected the administration's argument that it was legally prohibited from drawing money from the central bank for the CFPB's budget.
Vought, who serves as both the head of the Office of Management and Budget and the acting CFPB director, stated in a letter to Fed Chair Jerome Powell that he disagreed with the court's order. However, he confirmed the $145 million would be sufficient to fund the CFPB's functions from January to March.
A spokesperson for the Federal Reserve declined to comment on the request. Historically, the Fed has always supplied the funding requested by the consumer agency.
A Setback for Efforts to Dismantle the Watchdog
This funding reversal marks a significant setback for the administration's campaign to dismantle the CFPB. Throughout the year, top officials have pursued strategies ranging from reducing the agency's size to shutting it down completely, accusing it of politicized enforcement that burdens free enterprise—claims that the agency's staff and supporters reject.
The decision is the administration's second recent defeat concerning the CFPB. Last month, an appeals court threw out a previous ruling that would have allowed the agency's leadership to proceed with mass firings.
Lifeline Arrives as Agency Faced Insolvency
The $145 million arrives as a critical lifeline for the CFPB, which was potentially just weeks away from insolvency. The agency had previously informed a judge it could not guarantee sufficient funding to cover its expenses beyond December 31.
The requested amount aligns with the CFPB's average quarterly funding draw over the last decade. While the agency had been drawing down its available finances for nearly a year, its costs are currently lower due to the suspension of most activities and an exodus of workers.
