A federal judge has ruled that the Trump administration's attempt last year to halt funding for the Consumer Financial Protection Bureau was unlawful and unconstitutional. On Friday, U.S. District Judge Ann Aiken issued the decision, which follows similar rulings from two other judges. The case stems from early 2025, when acting CFPB director Russell Vought set the agency's funding request to zero in an effort to starve the bureau of funding.
Unlike many federal agencies that rely on annual funding votes by Congress, the CFPB receives its budget directly from the Federal Reserve Board. The 2010 Dodd-Frank Act, which created the CFPB, states that the Fed transfers funds based on the amount the CFPB director determines is "reasonably necessary" for the agency to operate. Vought, the architect of Project 2025, claimed at the time that the Federal Reserve had no "combined earnings" to fund the CFPB due to high interest rates causing technical losses. Judge Aiken clarified that the Fed's "combined earnings" refers to gross revenue before interest expenses, and ruled that Vought violated the Constitution's separation of powers by seizing Congress' "power of the purse."
The ruling supports the position that the CFPB director has a mandatory duty to calculate and request the funds required to run the agency and to communicate that need to the Federal Reserve. California Attorney General Rob Bonta, who led a coalition of 22 attorneys general, said the judge's order "demands the agency continue to be lawfully funded in order to keep up this important work, and halts the federal government from playing games with the financial protection of consumers in the future." A coalition of states had argued that shutting off funding deprived state agencies of critical law-enforcement data and consumer-complaint tracking tools they rely on to enforce the law.
Whether Aiken's ruling will have any practical impact is unclear, since it and related court rulings are subject to appeal. In a third lawsuit, a district judge in northern California ruled in March 2026 that a DOJ Office of Legal Counsel decision was "arbitrary and capricious," in violation of the Administrative Procedure Act, and therefore illegal. That judge formally vacated Vought's funding determinations and issued a declaratory judgment confirming that the Federal Reserve must transfer funds.