Trump Escalates War on CFPB With Move to Cut Off All Funding
The Trump administration is citing a fringe theory in court to kill the consumer watchdog agency.

The Trump administration has declared that the Consumer Financial Protection Bureau’s funding mechanism is illegal, which could force the agency to close in the coming months when it runs out of cash, reported Politico.
Normally, the CFPB is funded using money from the “combined earnings” of the Federal Reserve—but Republicans, in an attempt to defund the agency, have been putting forth an argument to interpret “combined earnings” as profit. The Justice Department said in a legal memo that since the Fed has no surplus cash, it can’t transfer any money to the CFPB.
This is the latest tactic in an ongoing effort by Republicans and the Trump administration to dismantle the agency.
The CFPB was created after the 2008 recession in order to protect consumers from the kinds of predatory, risky lending practices that contributed to the crash. At a time when more and more Americans are falling into debt and struggling to keep up with their loan payments, the loss of the CFPB would remove oversight from lenders.
Russell Vought, director of the Office of Management and Budget, is the mastermind behind the fight to eliminate the CFPB: In February, he requested $0 from the Fed to fund the CFPB, not arguing that the funding was illegal as the administration is now, but rather that the agency just didn’t need the funds. He’s also fighting in court for the ability to suspend 90 percent of CFPB staff.
Without funding, the agency “anticipates exhausting its currently available funds in early 2026,” it said in the court filing.








