A federal judge ruled on Tuesday that the Trump administration is legally required to secure funding for the US Consumer Financial Protection Bureau (CFPB), and that failure to do so would violate a previous court order barring the government from dismantling or closing the agency.

In the 32-page ruling, U.S. District Judge Amy Berman Jackson rejected the administration’s claim that it was legally barred from funding the agency, calling the administration’s justification “a pretext without legal basis.”

Simply because the administration is required to keep the agency operating, it cannot claim that it is legally blocked from getting funding to do so, according to Jackson, who explained that the refusal to get funding was an attempt to circumvent an earlier order.

The administration was attempting to circumvent the original order by “actively and blatantly attempting to shut down the agency through a variety of means,” Jackson wrote in Tuesday’s order. He was referring to the March 2025 order in which he issued a preliminary injunction barring the Trump administration from closing, dismantling or disabling the agency.

TRUMP ADMIN’S APPEAL DECISION BLOCKING CONSUMER FINANCIAL PROTECTION BUREAU’S DISMANTLING

Senator Tim Scott, RS.C. and chairman of the Senate Banking, Housing and Urban Affairs Committee, left, and Sen. Elizabeth Warren, D-Massachusetts, and ranking member of the Senate Banking, Housing and Urban Affairs Committee, during a hearing in Washington (Stefani Reynolds/Bloomberg via Getty Images/Getty Images)

The agency was created in 2008 by Sen. Elizabeth Warren, D-Mass., in direct response to the financial crisis 2007-2008, which exposed major gaps in how the US government protected consumers from risky and abusive financial practices. The agency helps consumers by providing educational materials and accepting complaints, and takes action against companies that break the law. It oversees banks, lenders and large non-bank entities such as credit reporting agencies and debt collection companies.

Activists participate in a rally outside the Consumer Financial Protection Bureau on March 24, 2025 in Washington, DC (Alex Wong/Getty Images/Getty Images)

Jackson’s decision Tuesday came at a critical time for the agency, which is on the verge of running out of funds.

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“Notably, however, not one cent of the funding needed to run the agency that has returned more than $21 billion to American consumers comes from taxpayer dollars,” Jackson wrote. “Today, the agency is hanging by a thread.”

The entrance to the headquarters of the Consumer Financial Protection Bureau on February 10, 2025 in Washington, DC (Anna Moneymaker/Getty Images)

STATE TREASURERS PUSH CFPB ON THIRD-PARTY FINANCIAL DATA ACCESS RULE

After taking office in early 2025 and having gained control of the CFPB, the Trump administration halted its regular operations. Russell Vought, the agency’s acting director, ordered employees to stop all work by February 2025 and closed the headquarters. In April, layoff notices were issued to more than 1,000 workers, although the layoffs have been blocked by a federal judge.

STATE TREASURERS PUSH CFPB ON THIRD-PARTY FINANCIAL DATA ACCESS RULE

Headquarters of the Consumer Financial Protection Bureau in Washington, DC, April 16, 2022. (Samuel Corm/Bloomberg via Getty Images/Getty Images)

The administration’s efforts to close or dismantle the agency, including attempts to halt operations, lay off staff and let funding expire, have been repeatedly blocked by the courts.

FOX Business reached out to the CFPB and the White House for comment.

Reuters contributed to this report.