The Trump administration has taken its most direct effort yet to shutter the Consumer Financial Protection Bureau (CFPB) once and for all.

In a court filing Monday, government lawyers declared the funding mechanism for the agency unlawful, effectively barring the CFPB from requesting additional money from the Federal Reserve, which primarily funds the bureau.

The filing stems from a complaint made in February by the National Treasury Employees Union against Russell Vought, the acting director of the CFPB.

Now with the Court of Appeals for the D.C. Circuit, the case was filed by the union representing CFPB employees terminated en masse during Vought’s early efforts to unwind the agency. The union argues that Vought’s mass terminations reflect an attempt to shutter the bureau in violation of the 2010 Dodd-Frank Act that established its existence.

A new legal opinion from the U.S. Department of Justice’s Office of Legal Counsel claims the Federal Reserve cannot legally fund the CFPB via “combined earnings of the Federal Reserve System” because the system has not generated any profits since 2022.

As a result, “there are no funds available from the CFPB’s congressionally authorized source of funding,” the opinion reads, suggesting that to even request the funds may be illegal. Hence, the CFPB will have no way to fund its legally mandated functions when it anticipates exhausting current appropriations “in early 2026,” the Justice Department argues.

The only way to re-fund the bureau, according to the opinion, would be through Federal Reserve profits or a new congressional appropriation — an unlikely outcome given the Trump administration’s and Republican lawmakers’ distaste for the financial watchdog agency.

In May 2024, the Supreme Court upheld the constitutionality of CFPB funding under the Constitution’s Appropriations Clause in a 7 to 2 ruling. Justice Clarence Thomas broke with fellow conservatives Neil Gorsuch and Samuel Alito, supporting CFPB funding in his majority opinion.

Much of the CFPB’s supervisory and enforcement work has been suspended since Vought took control of the bureau in early 2025.

During an appearance on “The Charlie Kirk Show” podcast in October, Vought said he believes the administration will succeed in shuttering the CFPB “probably within the next two or three months.”

“We don’t have anyone working there except our Republican appointees and a few [career employees] that are doing statutory responsibilities while we close down the agency,” Vought said.