The Trump administration has launched its most direct attempt yet to shut down the top US consumer watchdog, arguing the current funding mechanism behind the Consumer Financial Protection Bureau (CFPB) is unlawful.

Attorneys for the administration claimed in a court filing that the agency “anticipates exhausting its currently available funds in early 2026”, setting the stage for it to be dismantled.

The CFPB is legally barred from seeking additional funds from the Federal Reserve, its typical source of funding, the attorneys suggested.

Donald Trump’s officials have tried persistently to close the agency, attempting to fire the vast majority of its workforce. These efforts sparked months of legal wrangling.

The CFPB has returned more than $21bn to US consumers since it was set up, in the wake of the financial crisis, to shore up oversight of consumer financial firms.