Complaining About Complaints: States File Lawsuit Over CFPB Funding and Access to Consumer Data

On December 22, 2025, a coalition of more than 20 States and the District of Columbia filed a challenging whether leadership of the Consumer Financial Protection Bureau (CFPB) may interpret the agency’s statutory funding mechanism in a way that would cause the CFPB to run out of money and stop operating.

Congress created the CFPB in the Dodd-Frank Act and chose to fund it through transfers from the Federal Reserve rather than annual congressional appropriations. The statute allows the CFPB to request funding, up to a cap, from the Federal Reserve’s “combined earnings.” This funding structure has been in place since the CFPB was established and was upheld by the U.S. Supreme Court in 2024.

According to the complaint, the Acting Director of the CFPB has recently adopted a new interpretation of this funding provision, based on an opinion from the U.S. Department of Justice’s Office of Legal Counsel. Contrary to prior actions, the complaint contends, CFPB Acting Director Russel Vought now takes the position that the CFPB may request funds from the Federal Reserve only when it is operating at a net profit. Because the Federal Reserve has recently had higher interest expenses than interest income, the Acting Director has taken the view that the Federal Reserve has no “combined earnings,” so no funds are legally available.

The States argue that this interpretation is unlawful because the statute does not limit CFPB funding to profitable periods and that the CFPB has historically received funding even when the Federal Reserve did not generate net income. In their view, the new interpretation departs from the law and arbitrarily changes past practice to cut off funding and force the CFPB to shut down.

The States’ complaint focuses on the loss of CFPB data systems if the agency stops operating, including the CFPB’s consumer complaint database, which collects and standardizes complaints from consumers nationwide. They allege that they rely on this database as a key tool to identify patterns of potential misconduct, prioritize investigations and support enforcement of State consumer protection laws.

The States also point to the CFPB’s role in collecting and publishing Home Mortgage Disclosure Act (HMDA) data. According to the complaint, HMDA data is critical for monitoring lending trends, detecting discrimination and enforcing fair lending laws at the State level. The States argue that a CFPB shutdown would disrupt access to this data and deprive them of resources Congress intended them to have.

The lawsuit asks the court to declare the CFPB’s current funding interpretation unlawful and to prevent CFPB leadership from refusing to request funding on that basis.

We will continue to monitor developments and provide updates as the litigation proceeds. Please contact one of the authors or the Manatt professional with whom you work regularly if you have any questions.