Case: State of New York v. Vought

This is a lawsuit by 22 states challenging the Trump Administration's decisions cutting funding from the Consumer Financial Protection Bureau.

The CFPB was established in 2010 by the Dodd-Frank Act.  Among its duties, the CFPB aids states in their “advocacy for and protection of consumers in their respective jurisdictions.” For example, the CFPB maintained a consumer response system mandated by the Dodd-Frank Act, which allowed states to monitor and combat consumer fraud and discriminatory lending practices.

 Per the Dodd-Frank Act, the CFPB is funded by transfers “from the combined earnings of the Federal Reserve System” in the amount “determined by the [CFPB’s] Director to be reasonably necessary to carry out the authorities of the Bureau.” 12 U.S.C. § 5497(a)(1). Previous CFPB Directors have consistently interpreted this provision such that the CFPB’s funding comes from gross revenues generated by the Federal Reserve System. On November 20, 2025, the Trump administration’s CFPB Acting Director Russell Vought determined 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.” Therefore, Director Vought determined that he would not request funding from the Federal Reserve, because the Federal Reserve’s interest expenses exceeded its income at the time.  Collectively, the decisions to limit CFPB funding to profits and not to request any funding in November 2025 are referred to as the “Challenged Decisions”. 

On December 22, 2025, a coalition of 22 states and the District of Columbia brought suit against the CFPB, CFPB Acting Director Vought, and the Board of Governors of the Federal Reserve System in the U.S. District Court for the District of Oregon. The Plaintiff States challenged Director Vought’s decisions not to seek CFPB funding from the Federal Reserve, which they alleged “ma[de] it all but certain that the CFPB will run out of funding completely in January 2026” and result in the states “los[ing] statutorily guaranteed access to data and systems that each Plaintiff State uses to further their own regulatory goals and protection of their citizens.” 

In particular, the Plaintiff States alleged that Director Vought’s funding decisions were made in an attempt to dismantle the CFPB and violated the Administrative Procedure Act (“APA”) because they were in excess of statutory authority and contrary to law, arbitrary and capricious, and an unlawful withholding of agency action. They also alleged that the Challenged Decisions were ultra vires and violated the separation of powers doctrine. The Plaintiff States sought  declaratory and injunctive relief to halt the Challenged Decisions and restore funding to the CFPB, as well as attorneys’ fees. The case was assigned to Judge Ann L. Aiken.

On January 21, 2026, the Plaintiff States filed a motion for partial summary judgment with a request for an expedited hearing; they sought summary judgment on all counts of the complaint except the claim for arbitrary and capricious agency action in violation of the APA. The Plaintiff States noted that on January 9, 2026, Director Vought had requested funds from the Federal Reserve pursuant to a district court order, in National Treasury Employees Union v. Vought, that barred him from destroying the agency. However, that requested funding would expire on March 31, 2026. As such, in this lawsuit, the Plaintiff States asked the court to declare that the Challenged Decisions violated the APA and were ultra vires and to permanently enjoin the Challenged Decisions and compel the Defendants to request CFPB funding pursuant to the Dodd-Frank Act.

The case is ongoing.