WASHINGTON (AP) - The White House says federal agencies won't withhold money for North Carolina while a legal fight plays out over the state's law on gay, lesbian and transgender rights.
White House spokesman Josh Earnest says an administration review is now on hold about whether the law could force federal agencies to freeze money for health, education or housing programs.
He says the agencies will wait for the courts to determine whether the law violates the Civil Rights Act.
The Justice Department and North Carolina's governor sued each other on Monday.
At issue is a state law that says transgender people must use public bathrooms that correspond to the sex on their birth certificate.
President Barack Obama has said he believes the law is "wrong and should be overturned."
Governor McCrory's communications director Josh Ellis issued the following statement about North Carolina's federal funding:
"As Governor McCrory has said all along, his administration's assertive action against Washington overreach will protect federal funding for schools and other services while allowing the courts resolve this issue," said Josh Ellis.