US judge orders Trump administration to continue funding consumer watchdog agency

WASHINGTON, March 13 (Reuters) - A federal judge on Friday ordered the Trump administration to continue funding the U.S. Consumer Financial Protection Bureau indefinitely, saying top officials had unlawfully relied on deficient legal advice to justify their refusal to do so.

The ruling from U.S. District Judge Edward Davila of the Northern District of California marked another rebuke from the courts for President Donald Trump's handling of CFPB funding, which he has said should be eliminated. A judge in Washington reached similar conclusions in December.

Representatives for the CFPB did not immediately respond to requests for comment. The consumer watchdog's work included addressing financial practices such as predatory lending, excessive fees and counting medical debt in individuals' credit scores.

The administration in its early days virtually eliminated the agency's activities amid attempts to dismiss its workforce en masse.

In 2025, the Trump administration declined to fund the agency. In November, it said legal guidance prohibited it from financing the CFPB with money drawn from the Federal Reserve, as designed by Congress, because the Fed was losing money.

In his ruling, Judge Davila found that acting CFPB Director Russell Vought solicited a legal opinion from the Justice Department as a part of a "transparent attempt" to shut the CFPB by relying on a faulty interpretation of the Fed's finances and the law -- an end run around Congress's intent to shield the CFPB "from this exact transparent display of partisanship."

Davila also said that, while the CFPB was subject to a preliminary injunction in another case, Friday's ruling was meant to ensure that the CFPB would be funded indefinitely.

Under court order, Vought, who also serves as Trump's budget director, in January requested $145 million from the Fed to cover CFPB expenses for one fiscal quarter but noted that he did so under protest.

Top officials have accused the CFPB of politicized enforcement and burdening free enterprise, charges the agency's supporters and staff reject. They contend that the CFPB's dismantling amounts to a giveaway to politically connected donors and entrepreneurs.

The lawsuit was filed by consumer advocacy organizations in San Jose, California.