On Monday afternoon, a group of 22 mostly Democratic-led states filed suit in a Salem, Ore., U.S. District Court in an attempt to stop the Trump administration’s defunding of the Consumer Financial Protection Bureau (CFPB).
The suit has five co-lead plaintiffs: Oregon, New York, New Jersey, Colorado and California. Joining the co-leads were attorneys generals of Arizona, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Rhode Island, Vermont, Wisconsin and the District of Columbia.
The coalition of attorneys general filed suit against Russell Vought in his official capacity as Acting Director of the CFPB; the CFPB itself; and the Board of Governors of the Federal Reserve System.
The suit states that Vought’s determinations to not request funding from the Fed “make it all but certain that the CFPB will run out of funding completely in January 2026.”
The coalition is seeking a court order to prevent the administration from withholding funds for CFPB, and to order the agency to request funding from the Federal Reserve to fulfill its duties as required by the law.
“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,” stated New York Attorney General Letitia James in a press release.
She continued: “My office and attorneys general across the country rely on the CFPB for consumer complaints and other data to get justice for consumers. The administration’s actions are a handout to those who drive up costs by cheating hardworking Americans, and I will keep fighting to ensure they follow the law and our Constitution.”
The suit details the history of the CFPB, and how Congress has directed the bureau to be funded “from the combined earnings of the Federal Reserve System, the amount determined by the [CFPB’s] Director to be reasonably necessary to carry out the authorities of the Bureau under Federal consumer financial law, taking into account such other sums made available to the Bureau.”
The Fed has consistently complied with Congress’s provision, until recently, the suit states.
“Since his appointment to the CFPB as Acting Director on February 7, 2025, Defendant Russell T. Vought has worked tirelessly to terminate the CFPB’s operations by any means necessary — denying Plaintiffs access to CFPB resources to which they are statutorily entitled,” it claims. “In this action, Plaintiffs challenge Defendant Vought’s most recent effort to do so.”
“The CFPB is a watchdog that gets results. Take what happened with Equifax,” Oregon Attorney General Dan Rayfield stated. “The credit reporting agency failed to fix errors on people’s credit reports, allowed bad information to resurface, and sold credit scores that weren’t accurate. Those are all mistakes that can keep Oregonians from getting housing, jobs, or affordable credit. When powerful companies cut corners, someone has to stand up for everyday people and demand accountability.”
Shuttering the bureau has been a goal of the administration since its inauguration.
“Vought has worked tirelessly to terminate the CFPB’s operations by any means necessary,” the suit states.
The suit comes just days after the administration was dealt a setback last Thursday, as the full U.S. Court of Appeals for the District of Columbia Circuit overruled its smaller panel’s August decision that had allowed mass layoffs to proceed.
Earlier in December, four U.S. senators sent a letter to Vought, warning that CFPB closure could jeopardize the issuance of benchmark mortgage rates “lenders rely on every day.”
