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.

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