WASHINGTON--Nearly two dozen Democratic state attorneys general are suing the Trump administration over efforts to halt funding for the Consumer Financial Protection Bureau, Banking Dive reported.
The coalition of 22 AGs, led by New York Attorney General Letitia James, alleges that CFPB Acting Director Russ Vought’s refusal to accept funding from the Federal Reserve would effectively shut down the consumer watchdog next month.
“My office and attorneys general across the country rely on the CFPB for consumer complaints and other data to get justice for consumers,” James said in a prepared statement. “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.”
Under the Dodd-Frank Act, the CFPB is funded through the Federal Reserve rather than congressional appropriations, a structure the Supreme Court upheld last year after challenges from trade groups. The dispute centers on statutory language allowing the Bureau to draw funds from the Fed’s “combined earnings,” which the Justice Department’s Office of Legal Counsel interpreted this fall as meaning “profits.”
Banking Dive noted that Vought has said that interpretation prevents him from requesting funds, arguing the Fed is not currently profitable and therefore has no money to transfer to the CFPB. The attorneys general counter that the interpretation violates Dodd-Frank, which they say defines “combined earnings” as the Fed’s “gross revenues of the Federal Reserve without any deduction for interest or other expenses.”
The AGs argue that Vought’s decision not to renew CFPB funding is unlawful and unconstitutional.