The White House may not stop funding the Consumer Financial Protection Bureau, a federal judge ruled Tuesday, days before funds at the bureau were likely to run out and the consumer finance agency would lack the funds to pay its employees.

U.S. District Judge Amy Berman ruled the CFPB can continue to get its funds from the Federal Reserve, though the Fed is operating at a loss, and the White House has made a new legal argument that way the CFPB gets its funds is not valid.

At the heart of this case is whether White House Office of Management and Budget Director Russell Vought, who is also the acting director of the CFPB, can effectively shut down the agency and lay off all of the bureau’s employees. The CFPB has largely been inoperable since President Trump was sworn into office nearly a year ago. Its employees are mostly forbidden from doing any work, and most of the bureau’s operations this year has been to unwind the work it did under President Biden and even under Mr. Trump’s first term.

Vought himself has made comments indicating he intends to effectively shut down the CFPB.

The National Treasury Employees Union, which represents the workers at the CFPB, has been mostly successful in its legal efforts to stop the mass layoffs. The union sued Vought earlier this year and won a preliminary injunction stopping the layoffs.

In recent weeks, the White House has used a new line of argument to potentially get around the court’s restraining order. The argument is that the Federal Reserve has no “combined earnings” at the moment to fund the CFPB’s operations. The CFPB obtains its funding from the Fed through expected quarterly payments.

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