NEW YORK (AP) — A coalition of 21 attorneys general from Democratic-led states sued the Consumer Financial Protection Bureau and its director, Russell Vought, on Monday, asserting that the White House's argument to withhold funds from the consumer protection agency is unconstitutional.
The lawsuit has to do with the Trump administration's argument that the CFPB can only be funded by the Federal Reserve's profits. The Federal Reserve has been running a loss since 2022, a side effect of the Fed raising interest rates sharply to combat inflation, because it holds bonds that pay low interest from the pandemic but it needs to pay out higher amounts of interest to the banks that hold their deposits with the bank.
The White House has argued for several months that the CFPB cannot lawfully draw funds to fund its operations from the Fed if the Fed does not have “combined earnings” to allocate to the bureau. Without additional funds, the CFPB is expected to deplete its operating funds completely in January.
The lawsuit, filed in U.S. District Court in Eugene, Oregon, seeks to force the Trump administration to fund the CFPB.
"We’re asking the court to order the Consumer Financial Protection Bureau to seek available funding and do its job,” California Attorney General Rob Bonta said at a press conference.
The phrase “combined earnings” is found in the text of the Dodd-Frank Act, the law that created the CFPB more than a decade ago. Legislators and policymakers from the time Dodd-Frank was crafted have argued that the phrase “combined earnings” was not meant to infer the Fed needed to make an actual profit to fund the CFPB. The White House's interpretation of the Dodd-Frank Act is being litigated in a separate lawsuit filed by the CFPB employees' union against Vought.
The Democratic AGs argue that the CFPB was lawfully created by Congress and the White House cannot pick and choose which parts of the government it wishes to fund or not. Further, the CFPB is required to provide consumer complaint information to the individual states to stop bad actors, and if the CFPB is not operating, it cannot meet its statutory requirements.
“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,” said Attorney General Letitia James of New York.
A spokeswoman for Vought did not respond to an email for comment.
AP Reporter Morgan Lee contributed to this report from Santa Fe, New Mexico.
The Federal Reserve Chair logo appears on a podium at the Federal Reserve, Wednesday, Dec. 10, 2025, in Washington. (AP Photo/Jacquelyn Martin)
WASHINGTON (AP) — The funding lapse for the Department of Homeland Security will likely stretch into next week as the House contemplates passing a Senate plan it had previously rejected to fund the bulk of the agency, but not its immigration enforcement operations.
There was no resolution Thursday to the standoff, now in its 48th day, after both chambers met for just a few minutes in pro forma sessions. Nonetheless, the Republican leadership and President Donald Trump have coalesced around a plan to fully fund DHS as part of a two-step process. The agreement puts the congressional leaders on the same page for ending the impasse after they had pursued separate paths that resulted in Congress leaving Washington last week for its spring recess without a fix.
During the brief sessions, Senate Majority Leader John Thune, R-S.D., put aside the House plan to fund the entire department for 60 days. Then the House met briefly without taking up the bipartisan Senate plan that had been worked out with Democrats, though Thune is looking toward eventual passage.
“I don’t know the particulars around what the House will do with it,” Thune told reporters. “My assumption is, at some point, hopefully, they’ll move it.”
Speaker Mike Johnson, R-La., and Thune, announced Wednesday that they would return to the Senate measure, which funds most of DHS with the exception of U.S. Immigration and Customs Enforcement and U.S. Border Patrol. Republicans will try later to fund those agencies through party-line spending legislation that could take months to finish.
Neither outcome is guaranteed, and the strategy could potentially still face opposition from the GOP’s own ranks even though Trump has given his support.
Johnson’s embrace of the two-track plan marks a sharp reversal from less than a week ago, when he derided it as a “joke” and said he was “quite convinced that it can’t be that every Senate Republican read the language of this bill.”
He now appears to be on board. But securing support from his own conference could prove more difficult after a sizable group of House Republicans blasted the Senate-passed bill last week.
House Republicans were expected to hold a conference call later Thursday to discuss the next steps.
Thune pointed to a “number of conversations” when he was asked how the Republican leadership and Trump aligned to move ahead after their apparent divisions a week earlier.
“The thing that some people want to do, we can’t do,” said Thune. “And so you have to figure out what’s in the realm of the possible. And you have to just continue to define reality for people.”
Democrats in both chambers were aligned last week with the Senate funding plan passed with bipartisan support. Senate Democratic leader Chuck Schumer of New York on Wednesday blamed Republicans for not acting more quickly.
“Republican divisions derailed a bipartisan agreement, making American families pay the price for their dysfunction,” Schumer said.
Even with the progress, the most conservative lawmakers are likely to seek full funding for all of Trump’s immigration and deportation operations.
“Let’s make this simple: caving to Democrats and not paying CBP and ICE is agreeing to defund Law Enforcement and leaving our borders wide open again,” Rep. Scott Perry, R-Pa., posted on X. “If that’s the vote, I’m a NO.”
Meanwhile, the budget package that Trump wants prepared for later this year is expected to fund ICE and Border Patrol through the remainder of Trump’s term, as a way to try to ensure those agencies are no longer at risk from Democrats objecting to his immigration enforcement agenda. Trump said he wants that legislation on his desk by June 1.
Thune acknowledged the potential hurdles to that route, such as efforts to expand the scope of the bill. He said the goal is to keep it “as narrow and focused as possible” to speed passage.
“We need to kind of move with haste,” he said. “It’s probably not a likely magnet for all these other issues.”
The vast majority of DHS employees have reported to work during the shutdown, but many thousands have gone without pay. As more Transportation Security Administration agents called out from work, there was increasing frustration for air travelers confronted by long waits at some airport security lines. Those bottlenecks appeared to be clearing this week as agents began receiving backpay after Trump signed an executive order.
AP Congressional Correspondent Lisa Mascaro contributed to this report.
Senate Majority Leader John Thune, R-S.D., speaks to reporters outside the chamber after passing a measure by unanimous consent that would fund most of the Department of Homeland Security, if the House agrees, at the Capitol in Washington, Thursday, April 2, 2026. (AP Photo/J. Scott Applewhite)
Senate Majority Leader John Thune, R-S.D., gestures as he speaks to reporters outside the chamber after passing a a measure by unanimous consent that would fund most of the Department of Homeland Security if the House agrees, at the Capitol in Washington, Thursday, April 2, 2026. (AP Photo/J. Scott Applewhite)
Sen. Majority Leader John Thune, R-S.D., speaks during a news conference after a policy luncheon on Capitol Hill,Tuesday, March 24, 2026, in Washington. (AP Photo/Mariam Zuhaib)
Sen. Majority Leader John Thune, R-S.D., speaks during a news conference after a policy luncheon on Capitol Hill, Tuesday, March 24, 2026, in Washington. (AP Photo/Mariam Zuhaib)
Speaker of the House Mike Johnson, R-La., speaks during a news conference on Capitol Hill, Friday, March 27, 2026, in Washington. (AP Photo/Mariam Zuhaib)
