federal

California joined 21 other states and the District of Columbia Monday in a lawsuit that seeks to prevent the federal Consumer Financial Protection Bureau from being defunded and closed by the Trump administration.

The legal action filed in U.S. District Court in Eugene, Ore. accuses Acting Director Russell Vought of trying to illegally withhold funds from the agency by unlawfully interpreting its funding statute. Also named as defendants are the agency itself and the Federal Reserve’s Board of Governors.

“For California, the CFPB has been an invaluable enforcement partner, working hand-in-hand with our office to protect pocketbooks and stop unfair business practices. But once again, the Trump administration is trying to weaken and ultimately dismantle the CFPB,” California Attorney General Rob Bonta said, in a press conference to announce the 41-page legal action.

The agency did not immediately respond to a request for comment.

Established by Congress in 2010 after the subprime mortgage abuses that gave rise to the financial crisis, the agency is funded by the Federal Reserve as a method of insulating it from political pressure.

The Dodd-Frank Act statute requires the agency’s director to petition for a reasonable amount of funding to carry out the CFPB’s duties from the “combined earnings” of the Federal Reserve System.

Prior to this year that was interpreted to mean the Federal Reserve’s gross revenue. But an opinion from the Department of Justice claims that should be interpreted to mean the Federal Reserve’s profits, of which it has none since it has been operating at a loss since 2022. The lawsuit alleges the interpretation is bogus.

“Defendant Russell T. Vought has worked tirelessly to terminate the CFPB’s operations by any means necessary — denying Plaintiffs access to CFPB resources to which they are statutorily entitled. In this action, Plaintiffs challenge Defendant Vought’s most recent effort to do so,” the federal lawsuit states.

The complaint alleges the agency will run out of cash by next month if the policy is not reversed. Bonta said he and other attorney generals have not decided whether they will seek a restraining order or temporary injunction to change the new funding policy.

Prior to the second Trump administraition, the CPFB boasted of returning nearly $21 billion to consumers nationwide through enforcement actions, including against Wells Fargo in San Francisco over a scandal involving the creation of accounts never sought by customers.

Other big cases have been brought against student loan servicer Navient for mishandling payments and other issues, as well as Toyota Motor Credit for charging higher interest rates to Black and Asian customers.

However, this year the agency has dropped notable cases. It terminated early a consent order reached with Citibank over allegations it discriminated against customers with Armenian surnames in Los Angeles County.

It also dropped a lawsuit against Zelle that accused Wells Fargo, JP Morgan Chase, Bank of America and other banks of rushing the payments app into service, leading to $870 million in fraud-related losses by users. The app denied the allegations.

Monday’s lawsuit also notes that the agency is critical for states to carry out their own consumer protection mission and its closure would deprive them of their statutorily guaranteed access to a database run by the CFPB that tracks millions of consumer complaints, as well as to other data.

Vought was a chief architect of Project 2025, a Heritage Foundation blueprint to reduce the size and power of the federal bureaucracy during a second Trump admistration. In February, he ordered the agency to stop nearly all its work and has been seeking to drastically downsize it since.

The lawsuit filed Monday is the latest legal effort to keep the agency in business.

A lawsuit filed in February by National Treasury Employees Union and consumer groups accuses the Trump administration and Vought of attempting to unconstitutionally abolish the agency, created by an act of Congress.

“It is deflating, and it is unfortunate that Congress is not defending the power of the purse,” said Colorado Attorney General Philip Weiser, during Monday’s press conference.

“At other times, Congress vigilantly safeguarded its authority, but because of political polarization and fear of criticizing this President, the Congress is not doing it,” he said.

WASHINGTON — Attorneys for President Trump urged a federal judge on Friday to rule that Trump is entitled to presidential immunity from civil claims that he instigated a mob’s attack on the U.S. Capitol to stop Congress from certifying the results of the 2020 election.

U.S. District Judge Amit Mehta didn’t rule from the bench after hearing arguments from Trump attorneys and lawyers for Democratic members of Congress who sued the Republican president and allies over the Jan. 6. 2021, attack.

Trump spoke to a crowd of his supporters at the “Stop the Steal” rally near the White House before the mob’s attack disrupted the joint session of Congress for certifying Democratic President Joe Biden’s electoral victory.

Trump’s attorneys argue that his conduct leading up to Jan. 6 and on the day of the riot is protected by presidential immunity because he was acting in his official capacity.

“The entire point of immunity is to give the president clarity to speak in the moment as the commander-in-chief,” Trump attorney Joshua Halpern told the judge.

The lawmakers’ lawyers argue Trump can’t prove he was acting entirely in his official capacity rather than as an office-seeking private individual. And the U.S. Supreme Court has held that office-seeking conduct falls outside the scope of presidential immunity, they contend.

“President Trump has the burden of proof here,” said plaintiffs’ attorney Joseph Sellers. “We submit that he hasn’t come anywhere close to satisfying that burden.”

At the end of Friday’s hearing, Mehta said the arguments gave him “a lot to think about” and he would rule “as soon as we can.”

Rep. Bennie Thompson, a Mississippi Democrat who chaired the House Homeland Security Committee, sued Trump, his personal attorney Rudolph Giuliani and members of the Proud Boys and Oath Keepers extremist groups over the Jan. 6 riot. Other Democratic members of Congress later joined the litigation.

The civil claims survived Trump’s sweeping act of clemency on the first day of his second term, when he pardoned, commuted prison sentences and ordered the dismissal of all 1,500-plus criminal cases stemming from the Capitol siege. Over 100 police officers were injured while defending the Capitol from rioters.

Halpern said immunity enables the president to act “boldly and fearlessly.”

“Immunity exists to protect the president’s prerogatives,” he said.

Plaintiffs’ lawyers argue that the context and circumstances of the president’s remarks on Jan. 6 — not just the content of his words — are key to establishing whether he is immune from liability.

“You have to look at what happened leading up to January 6th,” Sellers said.

Kunzelman writes for the Associated Press.

MILWAUKEE — A jury found a Wisconsin judge accused of helping a Mexican immigrant dodge federal authorities guilty of obstruction Thursday, marking a victory for President Trump as he continues his sweeping immigration crackdown across the country.

Federal prosecutors charged Milwaukee County Circuit Judge Hannah Dugan with obstruction, a felony, and concealing an individual to prevent arrest, a misdemeanor, in April. The jury acquitted her on the concealment count, but she still faces up to five years in prison on the obstruction count.

The jury returned the verdicts after deliberating for six hours. Dugan faces up to five years in prison when she’s sentenced, but no date had been set as of late Thursday evening.

The case inflamed tensions over Trump’s immigration crackdown, with his administration branding Dugan an activist judge and Democrats countering that the administration was trying to make an example of Dugan to blunt judicial opposition to the operation.

Dugan and her attorneys left the courtroom, ducked into a side conference room and closed the door without speaking to reporters. Steve Biskupic, her lead attorney, later told reporters that he was disappointed with the ruling and didn’t understand how the jury could have reached a split verdict since the elements of both charges were virtually the same.

U.S. Atty. Brad Schimel denied the case was political and urged people to accept the verdict peacefully. He said courthouse arrests are safer because people are screened for weapons and it isn’t unfair for law enforcement to arrest wanted people in courthouses.

“Some have sought to make this about a larger political battle,” Schimel said. “While this case is serious for all involved, it is ultimately about a single day, a single bad day, in a public courthouse. The defendant is certainly not evil. Nor is she a martyr for some greater cause.”

U.S. Deputy Atty. Gen. Todd Blanche praised the verdict on X, saying nobody is above the law, even judges.

According to court filings that include an FBI affidavit and a federal grand jury indictment, immigration authorities traveled to the Milwaukee County courthouse on April 18 after learning 31-year-old Eduardo Flores-Ruiz had reentered the country illegally and was scheduled to appear before Dugan for a hearing in a state battery case.

Dugan learned that agents were in the corridor outside her courtroom waiting for Flores-Ruiz. She left the courtroom to confront them, falsely telling them their administrative warrant for Flores-Ruiz wasn’t sufficient grounds to arrest him and directing them to go to the chief judge’s office.

While the agents were gone, she addressed Flores-Ruiz’s case off the record, told his attorney that he could attend his next hearing via Zoom and led Flores-Ruiz and the attorney out a private jury door. Agents spotted Flores-Ruiz in the corridor, followed him outside and arrested him after a foot chase. The U.S. Department of Homeland Security announced in November he had been deported.

Prosecutors worked during Dugan’s trial to show that she directed agents to the chief judge’s office to create an opening for Flores-Ruiz to escape.

An FBI agent who led the investigation testified that after agents left the corridor, she immediately moved Flores-Ruiz’s case to the top of her docket, told him that he could appear for his next hearing via Zoom and led him out the private door.

Prosecutors also played audio recordings from her courtroom in which she can be heard telling her court reporter that she’d take “the heat” for leading Flores-Ruiz out the back.

Her attorneys countered that she was trying to follow courthouse protocols that called for court employees to report any immigration agents to their supervisors and she didn’t intentionally try to obstruct the arrest team.

Richmond writes for the Associated Press.

The FTC had accused the grocery delivery giant of charging fees to consumers after promising ‘free delivery’.

Instacart has agreed to pay $60m in refunds to settle allegations brought by the United States Federal Trade Commission (FTC) that the online grocery delivery platform deceived consumers about its membership programme and free delivery offers.

According to court documents filed in San Francisco on Thursday, Instacart’s offer of “free delivery” for first orders was illusory because shoppers were charged other fees, the FTC alleged.

The agency also accused Instacart of failing to adequately notify shoppers that their free trials of its Instacart+ subscription service would convert to paid memberships and of misleading consumers about its refund policy.

“The FTC is focused on monitoring online delivery services to ensure that competitors are transparently competing on price and delivery terms,” said Christopher Mufarrige, who leads the FTC’s consumer protection work.

An Instacart spokesperson said the company flatly denies any allegations of wrongdoing, but that the settlement allows the company to focus on shoppers and retailers.

“We provide straightforward marketing, transparent pricing and fees, clear terms, easy cancellation, and generous refund policies — all in full compliance with the law and exceeding industry norms,” the spokesperson said.

The shopping platform is currently under scrutiny after a recent study by nonprofit groups found that individual shoppers simultaneously received different prices for the same items at the same stores.

The FTC is investigating the company and has demanded information about Instacart’s Eversight pricing tool, the news agency Reuters reported on Wednesday.

Instacart has said that retailers are responsible for setting prices, and that pricing tests run through Eversight are random and not based on user data.

Lindsay Owens, the executive director of the Groundwork Collaborative, an economic think tank, criticised the grocery platform for using artificial intelligence (AI) to tweak its prices.

“At a time when families are being squeezed by the highest grocery costs in a generation, Instacart chose to run AI experiments that are quietly driving prices higher,” Owens said in written remarks provided to Al Jazeera.

She also called on the administration of US President Donald Trump to take action to prevent such price manipulation from continuing into the future.

“While the FTC’s investigation is welcome news, it must be followed with meaningful action that ends these exploitative pricing schemes and protects consumers,” Owens said. “Instacart must face consequences for their algorithmic price gouging, not just a slap on the wrist.”

On Wall Street, Instacart’s stock is taking a hit on the heels of the settlement, finishing out the day down 1.5 percent.

Dec. 12 (UPI) — President Donald Trump has voiced support for reclassifying cannabis and making it a legally obtainable drug — possibly as soon as next week.

The president might sign an executive order to reclassify cannabis as a Schedule III drug as soon as Monday, accordingto CNBC, but no later than early next year, Axios reported.

Trump has a team examining the matter, but no decision has been made as of Friday morning.

The president also met with House Speaker Mike Johnson, R-La., earlier this week to discuss the matter and is considering signing an executive order compelling federal agencies to reclassify cannabis as a Schedule III drug.

The federal government currently has cannabis classified as a Schedule I drug with no known medical uses and a strong potential for abuse and dependency, as defined by the Controlled Substances Act.

Other drugs similarly classified include LSD, heroin and MDMA.

A Schedule III drug is one with recognized medicinal use and a low potential for abuse and dependency. Examples include ketamine, opioids and anabolic steroids, all of which require prescriptions to obtain legally.

Food and Drug Administration and the Drug Enforcement Agency, with assistance from the Health and Human Services Department, mostly determine how various drugs are scheduled by the federal government.

The push for reclassification of cannabis comes as more U.S. adults are using cannabis, while moving away from alcohol and tobacco products.

Reclassifying cannabis would not make marijuana legal for recreational use, but it would become legal for medicinal purposes and require a prescription.

Reclassification also would make it legal for cannabis producers to transport their products between states and enable federally chartered banks to process financial transactions related to legal cannabis sales.

Cannabis producers and retailers also could benefit from federal tax breaks.

News of a potential change in federal cannabis laws and enforcement boosted related stocks on Friday.

Cannabis stocks surged upward upon the prospect of cannabis becoming a legally obtainable substance at the federal level, in addition to respective states that have enacted recreational or medical marijuana laws, and many times both.

Several cannabis stocks posted respective gains ranging from more than 10% to about 35% during trading on Friday, CNBC reported.

Two dozen states, three U.S. territories and the District ofColumbia have legalized the medicinal and recreational use of cannabis, and a recent Gallup poll showed 64% or respondents support legalization, according to Axios.

At the federal level, the House of Representatives briefly considered decriminalizing cannabis during President Trump’s first term in office but delayed the matter until after the 2020 general election.

Legalization also could lessen the profit potential for drug cartels, which spurred Colombian President GustavoPetro in March to urge the Colombian Congress to legalize cannabis.

He said the nation’s continued prohibition against cannabis “only brings violence” among its drug cartels.

Reporting from Washington — President Trump said he likely will support a congressional effort to end the federal ban on marijuana, a major step that would reshape the pot industry and end the threat of a Justice Department crackdown.

Trump’s remarks put him sharply at odds with Atty. Gen. Jeff Sessions on the issue. The bill in question, pushed by a bipartisan coalition, would allow states to go forward with legalization unencumbered by threats of federal prosecution. Sessions, by contrast, has ramped up those threats and has also lobbied Congress to reduce current protections for medical marijuana.

Trump made his comments to a gaggle of reporters Friday morning just before he boarded a helicopter on his way to the G-7 summit in Canada. His remarks came the day after the bipartisan group of lawmakers proposed their measure.

One of the lead sponsors is Sen. Cory Gardner (R-Colo.), who is aligned with Trump on several issues but recently has tangled with the administration over the Justice Department’s threats to restart prosecutions in states that have legalized marijuana.

“I support Sen. Gardner,” Trump said when asked about the bill. “I know exactly what he’s doing. We’re looking at it. But I probably will end up supporting that, yes.”

The legislative proposal, which is also championed by Sen. Elizabeth Warren (D-Mass.), would reshape the legal landscape for marijuana if it becomes law.

California and eight other states, as well as Washington, D.C., have legalized all adult use of marijuana. An additional 20 states permit marijuana for medical use.

But even as states legalize, marijuana has remained a risky and unstable business because of federal law making it illegal. Concerns about federal law enforcement seizures have inhibited most lenders from working with marijuana businesses. And investors have also proceeded cautiously.

“If you are in the marijuana business … you can’t get a bank loan or set up a bank account because of concern over the conflict between state and federal law,” Gardner said at a news conference Thursday to unveil the new bill. “We need to fix this. It is time we take this industry out of the shadows, bring these dollars out of the shadows.”

He called it a “public hypocrisy” that the firms are expected to pay taxes yet are barred from participation in the financial system.

A lifting of the federal prohibition also would bolster efforts to create uniform testing and regulatory standards for marijuana, and potentially free scientists to pursue research into the medical uses of marijuana.

Trump’s support could potentially have a major impact, providing political cover for Republicans who worry about being tagged as soft on drugs. Still, the proposal faces a tough road in Congress.

Even though most lawmakers now represent areas where pot is legal for at least medical use — and public opinion polls show majorities of Democratic and Republican voters nationwide favor legalization — congressional leaders have shown little appetite for loosening restrictions. The House is blocking the District of Columbia from permitting sales of recreational pot, even after its voters chose to legalize. A 2014 budget amendment that protects medical marijuana businesses from Drug Enforcement Administration raids is perpetually under attack.

“It faces tremendous head winds,” John Hudak, a marijuana policy expert at the Brookings Institution in Washington, said, referring to the Gardner-Warren bill.

Trump said he is likely to support the federal legalization effort despite a warning against it from a coalition of narcotics officer groups.

“We urge you to see through the smoke screen and reject attempts to encourage more drug use in America,” they wrote in a letter to Trump Thursday.

The marijuana industry continues to be whipsawed by mixed messages from the administration.

In January, the Justice Department sent pot businesses into a panic by rescinding an Obama-era policy that restricted prosecutors from targeting sellers who operate legally under state laws. Sessions warned at the time that any pot business could find itself in the crosshairs of prosecutors — regardless of whether marijuana was legal in their state.

The move enraged Gardner, who said the administration had earlier given him assurances that there would be no such raids, at least in his state. At Gardner’s behest, Trump in April ordered an abrupt retreat from the announced crackdown. Trump made the order without even consulting Sessions, a sign of their tense relationship.

But prosecutors did back off. During this administration, there have apparently been no federal raids or seizures of pot companies for sales that are legal under state law.

“Remarkably little, if anything, has changed,” said John Vardaman, a former Justice Department attorney who helped draft the Obama-era rules, known as the Cole memo, after former Deputy Atty. Gen. James M. Cole, who issued it. “Almost every U.S. attorney in states where marijuana is legal has decided to apply the same principles as the Cole memo,” said Vardaman, now an executive at Hypur, which sells banking compliance software to marijuana companies.

Banking is the area in which the Gardner bill could most help pot companies.

The Senate proposal, and a companion bipartisan measure in the House, would amend the Controlled Substances Act so that its marijuana provisions do not apply to any person or business that is in compliance with state laws. To put bankers at ease, it specifies that such marijuana sales would not be considered trafficking and do not amount to illegal financial transactions.

“The very people you want involved in this market are the ones who have been most reluctant to get involved because of the banking issue,” said Vardaman. “If you address that, you would have enormous beneficial effects for the industry.”

While Trump’s comments were welcomed by marijuana activists, they remain on edge, especially because of Trump’s spotty record at actually pushing legislation through Congress.

“We have seen this president voice his support for a lot of things related to cannabis, but he has done absolutely nothing to move legislation,” said Hudak. “This is just more empty rhetoric from a president who is vague on this issue.”

Gardner is hoping he can persuade more of his conservative colleagues to join the crusade by framing the issue as one of state’s rights. Several Republicans, including Reps. Dana Rohrabacher of Costa Mesa and Don Young of Alaska, are demanding an end to federal marijuana laws that intrude on the states. Their movement is slowly growing in Congress.

“This is a chance for us to express that federalism works,” said Gardner, who like some other Republicans was not a proponent of marijuana but took up the cause after his state’s voters endorsed legalization, “to take an idea that states have led with and provide a solution that allows them to continue to lead.”

evan.halper@latimes.com

Follow me: @evanhalper

UPDATES:

2:10 p.m.: This article was updated with additional analysis and reaction.

This article was originally published at 8:50 a.m.

The central bank cut rates for the third time in 2025 as limited government data clouds economic outlook.

The United States Federal Reserve has cut interest rates by a quarter of a percentage point, marking the last rate cut of the year.

On Wednesday, the Federal Reserve cut its benchmark interest rate by 25 basis points to 3.50 – 3.75 percent as US job growth has appeared to stall.

“Job gains have slowed this year, and the unemployment rate has edged up through September. More recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated,” the central bank said in a statement.

The cut was widely expected with an 89 percent probability of a rate cut, according to the CME Fed Watch, a tracker which monitors the likelihood of monetary policy decisions.

The decision came as the central bank faced gaps in many sets of government data used to assess the state of the US economy. During the record-long 43-day government shutdown, key agencies, including the Department of Labor, were unable to gather information needed for their reports.

Among them were import and export prices, the producer price index report, as well state employment and unemployment. The Bureau of Labor Statistics on Monday said that it would not release numbers from October because the agency did not have enough resources to collect information.

The last top-line data that the central bank had to make its interest rate decision was from September. At the time, the unemployment rate rose slightly to 4.4 percent and the core inflation rose to 2.8 percent.

A new government report on Wednesday showed US labour costs increased 0.8 percent in the third quarter, slightly less than expected.

The central bank might be more cautious about interest rate cuts in the next year as economic data shows a cooling labour market.

“There is considerable uncertainty around the labour market, but some of the weights should begin to lift early next year,” Ryan Sweet, managing director, US Macro Forecasting and Analysis at Oxford Economics, said in a report published ahead of the central bank’s decision.

“The challenge facing the Fed next year is the potential jobless expansion, when GDP increases but employment gains are modest, at best. This leaves the economy vulnerable to shocks because the labour market is the main firewall against a recession.”

Political turmoil

While the Fed has maintained its independence from partisan interference, there has been increased pressure from US President Donald Trump to cut rates further and he has often used hostile rhetoric towards the Fed chair to do it. The first rate cut in Trump’s second term as president came only in September.

The White House has also installed loyalist Stephen Miran to the Fed board where he is on leave from his job as an economic adviser in the White House. Miran has dissented against the 25 basis point rate cut that was undertaken at each of the two meetings he has attended in favour of larger half-percentage-point cuts.

On Wednesday, Miran, again, voted for a more aggressive cut of half a percentage point while governors Austan D Goolsbee and Jeffrey R Schmid voted not to make a rate cut at all. The other governors all voted for a 25 basis point cut.

“Still elevated inflation and a backlog of economic data complicate the picture for the Fed looking into next year — with President Trump’s aggressive push for lower short-term rates potentially complicating the objective of bringing down longer-term borrowing costs,” Daniel Hornung, policy fellow at Stanford Institute of Economic Policy Research, said in remarks provided to Al Jazeera.

Fed Chair Powell’s term is up in mid-May 2026. Trump, in an interview published on Tuesday in news outlet Politico, said support for immediately cutting interest rates would be a requirement for anyone he chose to lead the Federal Reserve.