Trump administration has made its most direct attempt yet to shut down the leading US consumer watchdog, arguing that the Consumer Financial Protection Bureau's (CFPB) current funding mechanism is illegal.
Administration lawyers said in filing a lawsuit that the agency “expects to exhaust currently available funds in early 2026,” setting the stage for its dismantling.
The CFPB is legally prohibited from seeking additional funds from the Federal Reserve, its typical funding source, the lawyers said.
Donald Trump officials have tried persistently shut down the agency in an attempt to fire the vast majority of its employees. The effort sparked months of legal wrangling.
CFPB is back over 21 billion dollars for American consumers since it was created after the financial crisis to strengthen oversight of consumer financial firms.
Legal Adviser of the Ministry of Justice published the view that the CFPB currently cannot receive money from the Fed states that “total Federal Reserve income” refers to the Fed's earnings, which have been operating at a loss since 2022.
Several federal judges have previously rejected that argument, used by companies seeking to dismiss lawsuits brought by the agency. reported Politician.
Russell Vought, the White House director of management and budget, said in October that he planned to close the agency and that it would take up to three months.
The announcement was criticized by Democrats, given the administration's previous statements to the contrary and court rulings blocking the agency's closure.
“These comments are especially troubling given that the federal court specifically blocked you from illegally closing the agency.” wrote Senate Banking Committee Democrats in a letter to Vought. “Your continued attempts to shut down the CFPB are illegal, and American families must pay the price for it.”
Vought already suspended much of the agency's work as the D.C. Circuit Court of Appeals decides whether to hear the case after a lower court ruling blocked the firing of about 90% of the agency's employees.
The CFPB did not immediately respond to a request for comment.
