Court Orders the Administration to Keep Funding the CFPB: What the Consumer Watchdog Fight Means for Florida Borrowers

The Consumer Financial Protection Bureau, the federal agency created after the 2008 financial crisis to protect consumers of financial services, ended 2025 close to running out of money ². On December 30, 2025, U.S. District Judge Amy Berman Jackson ruled that the administration’s decision not to request new funding for the agency violates the preliminary injunction she entered in March ¹². For Floridians dealing with debt, the case is worth following because it affects who is watching the companies on the other side of their accounts.

How the Funding Fight Started

Unlike most federal agencies, the CFPB is funded by the Federal Reserve rather than through annual appropriations from Congress ². The National Treasury Employees Union, representing CFPB employees, sued Russ Vought, the acting CFPB director, after the administration moved to shut the agency down ¹³. On March 28, 2025, the court issued a preliminary injunction designed to ensure that the CFPB would continue to exist and perform its statutory duties while the case is litigated ¹.

A D.C. Circuit panel vacated that injunction in August 2025, but on December 17, 2025, the full D.C. Circuit granted rehearing en banc and vacated the panel decision, leaving a partial stay in place ¹. The appeal is set for a hearing in February ³.

Meanwhile, in November, a Justice Department Office of Legal Counsel memo concluded that the CFPB cannot draw funds from the Federal Reserve while the Fed is operating at a loss ¹. On that basis, the government told the court that the bureau expected to exhaust its available funds in early 2026 ¹.

What the Court Decided

Judge Berman Jackson rejected that position in a 32-page ruling ². She found that the Federal Reserve had funded the CFPB throughout the period since 2022 when its interest expenses exceeded its earnings, and that the new reading of the statute was a sharp departure from the bureau’s longstanding interpretation ¹. The court described the government’s new understanding of “combined earnings” as “an unsupported and transparent attempt” to achieve the very result the injunction was meant to prevent ¹². Its order clarified that the decision not to request funding contravenes the preliminary injunction ¹.

The judge also observed that the funding lapse was “manufactured by the defendants” and was not a valid reason to abandon the agency’s obligations ³. Separately, Reuters noted that Congress lowered the cap on the CFPB’s allowable funding in 2025, so the agency may face tighter budgets regardless of how the case ends ².

Why It Matters to People With Debt

The court’s order keeps the money flowing for now, but the larger dispute is unresolved, and the appeal is still pending ¹³. Supporters of the agency argue that without it, the public would be more exposed to predatory lending, scams and other abuses, while the administration and other critics have accused it of politicized enforcement ². Whatever the outcome, a weaker federal watchdog generally means individual borrowers need to be more careful on their own behalf.

A few practical habits help regardless of what happens in Washington:

• Keep records. Save statements, payment confirmations, letters from collectors and any notes from phone calls, with dates.
• Read collection letters closely. Check the creditor’s name, the balance and whether the debt is actually owed before paying or agreeing to anything.
• Check credit reports. Review reports periodically and dispute errors in writing with the credit reporting company.
• Respond to lawsuits. A summons for a debt comes with a deadline to respond, and missing it can make matters much harder to fix.

When debts reach the point of lawsuits, garnishment threats or payments that can no longer be made, it is time to look at all the legal options, including a Chapter 7 or Chapter 13 bankruptcy case where appropriate.

Anyone in South Florida weighing their options can request a confidential consultation with The Roca Law Firm, in English or Spanish.