The Democratic attorneys general for 21 states and the District of Columbia are suing Office of Management and Budget Director Russell Vought, who also serves as the acting director of the Consumer Financial Protection Bureau, to keep the bureau funded.
The lawsuit comes at the end of a tumultuous year for the watchdog agency, as President Donald Trump’s administration has slashed the CFPB with mass layoffs and budget cuts throughout 2025. The administration determined in November that the bureau cannot legally draw funds from the currently nonprofitable Federal Reserve and expects it to run out of funding by early 2026.
The lawsuit filed on Monday hinges on this funding determination, with the attorneys general arguing that the position is part of what they say is Vought’s plan “to terminate the CFPB’s operations by any means necessary.”
“In a reversal of the position the CFPB and Board of Governors have held for more than a decade, Defendant Vought, and through him the CFPB, now take the position that the Federal Reserve’s ‘combined earnings,’ from which CFPB’s funding flows, are limited to the Federal Reserve’s ‘profits’ rather than its gross revenue,” the complaint said. “Thus, according to Defendant Vought, when the Federal Reserve is not ‘profitable,’ there is no money available for the Federal Reserve to transfer to the CFPB.”
T. Elliot Gaiser, assistant attorney general for the Office of Special Counsel, wrote in November that the OSC determined these “combined earnings” of the Fed, which fund the CFPB, refer to the profits of the Fed, and the Fed has not been profitable since 2022.
“If the Federal Reserve has no profits, it cannot transfer money to the CFPB,” Gaiser wrote. “Because the only lawful source of funding from the Federal Reserve has dried up, the proper method for obtaining additional funds is to request them from Congress.”
With the majority in both chambers of Congress, the GOP does not look so favorably upon the market oversight agency that was the brainchild of Sen. Elizabeth Warren (D-MA). The administration wrote in a previous court filing that the CFPB “does not know whether and the extent to which Congress will appropriate funding” for it.
The lawsuit, filed in the U.S. District Court in Eugene, Oregon, requests that the court rule that Vought’s funding determinations are unlawful. It also asks the court to declare that the Fed’s combined earnings “means the Federal Reserve’s gross revenues without any deduction for its expenses.”
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“The Trump Administration’s latest effort to destroy the CFPB means that hundreds of thousands of consumer complaints will fall on deaf ears,” California Attorney General Rob Bonta, a plaintiff in the lawsuit, said in a statement.
“By refusing to fund the CFPB, even when legal and appropriate funding mechanisms are available, the Trump Administration has sharpened its message that it does not care about affordability, that it does not care to be on the side of families and working Americans,” he added. “California cares. With this lawsuit, we demand that the federal government keep up its side of the deal by lawfully funding the Bureau and its critical work.”