A federal judge just threw a wrench into the White House’s latest scheme to defund the Consumer Financial Protection Bureau (CFPB), ensuring the agency’s employees won’t be left high and dry.

In a nutshell, Judge Amy Berman has ruled that the CFPB must keep receiving funds from the Federal Reserve, blocking a last-ditch effort by the White House to starve the agency of cash just as its coffers were about to run dry, Breitbart reported. 

Let’s rewind a bit: since President Donald Trump took office nearly a year ago, the CFPB has been a shadow of its former self, with employees largely sidelined and the agency focused on dismantling policies from the Biden era and Trump’s first term.

Judge Stands Firm Against Funding Cuts

The drama kicked up a notch earlier this year when the White House issued a “reduction in force” order, threatening layoffs or furloughs for many CFPB staffers.

Thankfully, the National Treasury Employees Union stepped in, securing a preliminary injunction to stop the mass layoffs while the legal battle continues.

But the White House wasn’t done yet, with Budget Director Russell Vought, who’s also acting as CFPB director, openly declaring his intent to shutter the agency entirely.

White House’s New Legal Gambit Fails

Fast forward to recent weeks, and the administration rolled out a fresh legal argument, claiming that since the Federal Reserve has been operating at a loss since 2022, there are no “combined earnings” to fund the CFPB.

Here’s the catch: the Fed’s losses stem from higher interest payouts to banks and holding low-yield bonds from the COVID-19 era, yet it’s still recording a “deferred asset” on its books with plans to recover over time.

Despite this, the CFPB has drawn from the Fed’s operating budget since 2011, even during Trump’s first term, making the White House’s sudden pivot seem more like a political stunt than a fiscal necessity.

Court Calls Out Transparent Tactics

Enter Judge Berman, who wasn’t buying the administration’s latest excuse, especially after White House lawyers warned the court in early November that the CFPB’s appropriations would dry up in early 2026 without congressional action.

In her ruling, she sharply criticized the new theory, stating, “It appears that defendants’ new understanding of ‘combined earnings’ is an unsupported and transparent attempt to starve the CFPB of funding,” calling it a blatant dodge of her earlier injunction (Judge Amy Berman).

One has to wonder if this “creative accounting” is just another way to push a progressive-era agency into oblivion without a fair fight in court.

Employees Breathe a Sigh of Relief

Jennifer Bennett of Gupta Wessler LLP, representing CFPB employees, didn’t hold back either, noting, “We’re very pleased that the court made clear what should have been obvious: Vought can’t justify abandoning the agency’s obligations or violating a court order by manufacturing a lack of funding” (Jennifer Bennett).

While conservatives might cheer the idea of trimming bloated bureaucracies, there’s something unsettling about backdoor tactics that leave hardworking folks in limbo—surely there’s a better way to debate the CFPB’s future than playing games with paychecks.

As the dust settles, a trial looms in February 2026 to determine if the employees’ union can directly challenge Vought over the threatened layoffs, promising more fireworks in this ongoing saga of government overreach versus fiscal restraint.