Judge Blocks Attempt to Cut Off CFPB Funding

The ruling came in a case filed in December 2025 by more than 20 Democratic state attorneys general, according to the report.

The CFPB under former acting Director Russell Vought had refused to seek funding from the Federal Reserve, saying that it could not do so while the central bank was not profitable, per the report.

The state attorneys general argued that a lack of funding at the CFPB would harm consumers by forcing the agency to shut down its consumer complaint database and would harm states that use data from the CFPB to determine banks’ fair lending compliance.

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The case named Vought, the CFPB and the Federal Reserve Board as defendants, according to the court opinion posted by Bloomberg Law.

The judge ruled that the CFPB’s decision not to seek funding was improper and violated the constitutional separation of powers, according to the report.

Two earlier court orders had rejected attempts to cut the CFPB’s funding, and the Trump administration has appealed those rulings, per the report.

Neither the CFPB nor the Federal Reserve Board immediately replied to PYMNTS’ request for comment on the most recent ruling.

When 21 states and the District of Columbia sued the Trump administration in December to stop what they said was illegal funding of the CFPB, they alleged in their complaint that Vought was attempting to completely defund the agency by refusing to request funding from the Federal Reserve; that the CFPB has a legal requirement to collect consumer complaints, process them and share the data with the states; and that Vought’s actions violated the law and the Constitution.

Following the recent ruling, Oregon Attorney General Dan Rayfield said in a Monday press release that the ruling keeps the CFPB funded.

“The Consumer Financial Protection Bureau does critical work to protect consumers from financial tricks and traps, putting billions back in the pockets of people who’ve been harmed,” Rayfield said. “This ruling is a win for every Oregonian who’s ever been hit with a hidden fee or a loan that wasn’t what they were promised.”