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LANSING – Michigan Attorney General Dana Nessel announced a decision by the U.S. District Court for the District of Oregon, holding that the Consumer Financial Protection Bureau (CFPB) Acting Director Mark Paoletta must request necessary funding from the Federal Reserve so the CFPB can operate as Congress intended: lawfully funded and working to ensure consumers have access to fair, transparent, and competitive markets for consumer financial products. The court held that former Acting Director Russell Vought’s insistence not to request funds for the CFPB was unlawful and violated the Separation of Powers Clause in the U.S. Constitution. This order resolves, in large part, the lawsuit filed last year by Attorney General Nessel and a coalition of 22 attorneys general, pending appeal.
“Congress rightly decided Americans deserve a fair marketplace for financial products and services and created the CFPB to ensure their protection from predatory businesses,” said Attorney General Nessel. “The CFPB has an important job to do, and efforts by its directors to erase the bureau by starving its funding are unlawful. I am proud to stand with my fellow attorneys general in this victory defending the CFPB and its vital mission to protect millions of American consumers.”
The CFPB was created to protect consumers in the financial marketplace, and it performs critical functions necessary to the functioning of the financial system. For 14 years, the CFPB has served as an invaluable partner to state attorneys general and state banking regulators as an enforcer, regulator, and resource for consumers. Shortly after taking office, the Trump administration launched a campaign of destruction and systemic shuttering of the CFPB, threatening catastrophic harm to hardworking families and consumer financial markets nationwide.
The Trump administration has taken a series of actions intended to debilitate the CFPB, including issuing a suspension of work across the agency, terminating probationary employees, and attempting to lay off 90% of the CFPB’s workforce — moves that were swiftly blocked by the courts.
In November 2025, the CFPB gave notice that it would not request funding from the Federal Reserve to continue its operations based on a specious legal analysis it received from U.S. Department of Justice, which advised that CFPB could not lawfully draw funds from the Federal Reserve to maintain its operations because the Federal Reserve is “unprofitable.” In December 2025, Attorney General Nessel joined a coalition of 22 attorneys general in filing a lawsuit challenging the CFPB acting director’s unlawful decision not to fund the agency’s operations, preventing it from performing its legally mandated functions.
In the lawsuit, the attorneys general argued that CFPB’s failure to seek funding for continued operations, including operations of its consumer complaints database, would harm consumers and result in statutorily mandated functions not being performed. The attorneys general asked the court to declare this action unlawful and ensure CFPB is properly funded and, with this ruling, it has.
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