On January 21, attorneys general from 22 states and territories filed a motion for partial summary judgment against the CFPB, the Fed, and the acting director of the CFPB. As previously covered by InfoBytes, these attorneys general filed a complaint alleging the current acting director’s determination that the CFPB will not request funding from the Fed unless it is “profitable,” which violated the APA and the U.S. Constitution by disregarding congressional mandates and statutory definitions.

The attorneys general sought declaratory and injunctive relief under Rule 56, arguing that the CFPB’s acting director violated the Dodd-Frank Act by refusing to request operating funds from the Fed, creating a funding lapse risk. Separately, a district court ruled that refusing to request funds violated a preliminary injunction and directed him to seek funding (covered by InfoBytes here), which he subsequently did.

The plaintiffs contended that two specific actions by the CFPB’s acting director were unlawful: (1) the acting director’s determination that he cannot request funds from the Fed when the Fed’s interest expenses exceed its income; and (2) the acting director’s decision not to request funds from the Federal Reserve for FY 2026.

The plaintiffs contended these actions were unlawful and in violation of the APA as the acting director threatened to exhaust the CFPB’s funding until the end of March unless the court intervened. They further argued that the acting director’s decisions not only violated the Dodd-Frank Act’s mandatory funding scheme but also impermissibly intruded on Congress’s Article I authority by effectively nullifying a congressionally prescribed funding mechanism. The plaintiffs asked the court to vacate the challenged decisions, compel the CFPB to request the required funding, and issue a permanent injunction to prevent ongoing harm to the consumer-protection framework.