A federal judge has ruled that the Trump administration must continue funding the Consumer Financial Protection Bureau.
The CFPB is unique among federal agencies in that its funding comes directly from the Federal Reserve based on a request from the bureau’s director. Last year, CFPB acting Director Russell Vought announced he would not ask the Fed for the agency’s next appropriation, arguing he can only do so if the Fed makes a profit.
The CFPB was expected to run out of funding early this year. However, Vought requested a short-term appropriation from the Fed after a U.S. District Court for D.C. judge ruled the method the administration used to reject funding was inconsistent with statute and “an unsupported and transparent attempt to starve the CFPB of funding.” In a ruling last week, U.S. District Judge Edward Davila came to a similar conclusion in a California lawsuit brought by three nonprofits that rely on CFPB services.
“Ultimately, the court finds it clear from the legislative history that Congress, in creating the CFPB and recognizing the critical importance of its continued uninterrupted work, intended to create a steady stream of funding to the CFPB, insulated from partisan politics in Congress,” Davila wrote in his opinion.
The Trump administration has appealed the D.C. decision but had not filed an appeal of the California decision as of Monday.
