Federal judge orders CFPB to request funding from Federal Reserve in 22-state lawsuit
A federal court in Oregon ruled that the Consumer Financial Protection Bureau's acting director must seek operating funds from the Federal Reserve, according to Vermont Attorney General Charity Clark, whose state is part of the coalition that sued.
A federal judge in Oregon has ruled that the acting director of the Consumer Financial Protection Bureau must request funding from the Federal Reserve so the agency can keep operating, according to Vermont Attorney General Charity Clark, whose office joined a coalition of 22 attorneys general in the lawsuit.
The U.S. District Court for the District of Oregon held that former Acting Director Russell Vought's refusal to request funds for the bureau was unlawful and violated the constitutional separation of powers, Clark's office said. The order directs current Acting Director Mark Paoletta to seek the funding.
Clark's office said the order resolves the lawsuit in large part, pending appeal.
In November 2025, the bureau said it would not request funding from the Federal Reserve, citing a U.S. Justice Department legal analysis that concluded it could not lawfully draw funds because the Federal Reserve was "unprofitable," according to the attorney general's office, which called that analysis specious. The states filed suit in December 2025, challenging the decision.
In the lawsuit, the attorneys general argued that the bureau's failure to seek funding, including for its consumer complaints database, would harm consumers and leave functions required by law undone. They asked the court to declare the decision unlawful and ensure the agency was properly funded.
The CFPB was created to protect consumers in the financial marketplace. Clark's office said the Trump administration has sought to shut down the bureau, including by suspending work across the agency, firing probationary employees and attempting to issue layoff notices to 90% of its workforce, a move the office said the courts blocked.
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