Nearly two dozen states sue the Trump administration over funding for CFPB

"The consumer watchdog agency is funded by the Federal Reserve unlike many other federal agencies to insulate it from political whims. But under Acting Director Russell Vought, the CFPB is refusing to accept money from the Fed. The CFPB argues that the law that established the agency says it must get funding from the Fed's "combined earnings." But the Fed doesn't have those earnings, the Trump administration says, because it has been operating at a loss."

"In their suit, filed in the U.S. District Court in Oregon, the states argue Vought and CFPB are using "an unreasonable and unlawful interpretation of 'combined earnings.'" The agency's stance puts the "CFPB at risk of losing all of its funding as early as January 2026," the states argue. Such a loss of funding would hurt their residents, the attorney generals argue."

""Defunding the Consumer Financial Protection Bureau will make it harder to stop predatory lenders, scammers, and other bad actors from taking advantage of New Yorkers," James said in the statement. "My office and attorneys general across the country rely on the CFPB for consumer complaints an"

A coalition of 21 states and the District of Columbia sued to block actions that would defund the Consumer Financial Protection Bureau. The CFPB receives funding from the Federal Reserve to remain insulated from political pressure, but the agency under Acting Director Russell Vought is refusing Fed transfers. The CFPB contends the law requires funding from the Fed's "combined earnings," while the administration contends the Fed lacks those earnings due to operating at a loss. State attorneys general argue that "combined earnings" means Fed revenues and say the agency could lose all funding by January 2026, harming residents and consumer protections.

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