Democratic-led states challenge Trump administration’s attempt to defund CFPB

A coalition of attorneys general from 21 U.S. states and the District of Columbia has filed a lawsuit to block the Trump administration’s effort to defund the Consumer Financial Protection Bureau (CFPB). The suit argues that the administration’s refusal to request funding from the Federal Reserve is unlawful and violates Congress’s constitutional authority, effectively undermining an independent agency created to protect consumers after the 2008 financial crisis. The CFPB, which has returned over $21 billion to consumers since its creation, has seen its activities largely halted under acting director Russell Vought. State attorneys general contend that the funding maneuver threatens consumer protection, disrupts legally mandated cooperation with states, and represents an executive overreach that weakens institutional checks and balances.

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