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A service for banking industry professionals · Thursday, February 6, 2025 · 783,558,833 Articles · 3+ Million Readers

ICYMI: Multistate coalition blocks Trump Administration from freezing essential federal funding

OLYMPIA — The U.S. District Court for the District of Rhode Island today granted a request from 22 states, including Washington, for a temporary restraining order halting a White House policy that would block federal agency grants, loans and other financial assistance programs.

This temporary restraining order extends beyond the administrative stay granted Tuesday by the U.S. District Court for the District of Columbia in response to a lawsuit brought by nonprofit groups that receive federal funds.

“This outcome reminds us that our country is still governed by the Constitution, even when we have a lawless president determined to sow disorder and eliminate vital programs,” Attorney General Nick Brown said. “Now more than ever, states have a key role in upholding the rule of law.”

The proposed policy, issued by the president’s Office of Management and Budget on Monday, would have put an indefinite pause on the majority of federal assistance, jeopardizing funds for health care, education, law enforcement, disaster relief, infrastructure and more. The next day, Attorney General Nick Brown and attorneys general from 22 other states sued to immediately stop the enforcement of the OMB policy and preserve trillions of dollars in essential funding.

While the administration has attempted to rescind the policy, states and organizations that receive federal funding continue to experience major disruptions. Following OMB’s issuance of the policy, Medicaid funds in multiple states were frozen. Head Start programs across the country were cut off from funds, leading some childcare centers to close. Despite the District Court for the District of Columbia’s stay, disruptions to critical funds are continuing to be reported across the country.

The White House signaled Wednesday they would be re-issuing the order in some form, but today’s temporary restraining order restrains and prohibits the administration from doing that for now as well.

The lawsuit was led by the attorneys general of New York, California, Illinois, Massachusetts, New Jersey and Rhode Island. Joining the lawsuit are the attorneys general of Arizona, Colorado, Connecticut, Delaware, Hawaii, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Oregon, Vermont, Washington, Wisconsin and the District of Columbia.

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