Citibank faces growing legal battle over frozen climate funds
A third nonprofit has sued Citibank for blocking access to climate funding backed by the U.S. Environmental Protection Agency, intensifying a legal fight over the Trump administration’s efforts to roll back Biden-era green initiatives.
Jean Chemnick reports for E&E News.
In short:
- Power Forward Communities, awarded $2 billion through the EPA’s Greenhouse Gas Reduction Fund, sued Citibank after its accounts were frozen for nearly three weeks.
- The bank, which administers $14 billion in green banking funds, has frozen multiple accounts since at least Feb. 18, despite contractual obligations to provide access unless EPA intervenes over fraud or misuse.
- The move follows pressure from President Donald Trump and EPA administrator Lee Zeldin, who have sought to reclaim climate-related funding, citing political concerns.
Key quote:
“We entered into a contract with the federal government in good faith, and as a result, we have obligations we must meet, and commitments to the American people we intend to keep.”
— Tim Mayopoulos, CEO of Power Forward Communities
Why this matters:
The fight over green banking funds is shaping up to be a flashpoint in the broader struggle over climate policy under the Trump administration. At the heart of the dispute is Citibank’s decision to freeze accounts tied to green banking initiatives — an action that has effectively cut off financing for clean energy and low-carbon projects.
Critics see the move as part of a larger pattern in which financial institutions, facing pressure from Republican lawmakers and regulators, are retreating from climate-focused investments. The implications could be far-reaching, potentially undermining future federal climate programs, stalling nonprofit-led renewable energy initiatives, and limiting access to clean energy funding for low-income communities.
Read more: Trump administration sued over frozen climate funds