Attorney General Charity Clark has joined a group of state attorneys general in filing a lawsuit against the Trump Administration, seeking to prevent the complete defunding of the Consumer Financial Protection Bureau (CFPB). The CFPB, which has returned more than $21 billion to over 205 million Americans since its creation 14 years ago, is facing a funding crisis. According to the coalition’s complaint, acting director Russel Vought is refusing to request necessary funding from the Federal Reserve. Without this funding, the agency could run out of money by January 2026.
The lawsuit contends that removing funding from the CFPB would significantly harm consumers and disrupt states’ ability to protect them. State officials rely on consumer complaints and data collected by the CFPB for investigations and legal actions against financial wrongdoing. The coalition argues that federal law requires the CFPB both to process consumer complaints and share this information with state authorities. They allege that Director Vought’s actions are unlawful and violate constitutional principles as well as congressional intent.
Attorney General Clark stated: “Defunding the CFPB will only benefit the bad actors who prey on consumers and scam Americans out of their hard-earned money. What the Administration is seeking to do is unlawful and will harm consumers. Considering the CFPB was established in the wake of the financial crisis, you don’t have to go far to see the pitfalls of stripping consumers of this protection.”
The CFPB was created after the Great Recession as an independent agency funded by transfers from the Federal Reserve rather than annual congressional appropriations. Its mission includes regulating financial institutions, enforcing rules related to consumer protection laws, collecting economic data, and handling millions of consumer complaints each year. It also supervises major banks for compliance with federal consumer financial laws.
States depend on information provided by the CFPB for their own enforcement efforts. This includes using complaint data to investigate misconduct, obtain refunds or restitution for harmed consumers, and support litigation against financial entities accused of wrongdoing.
Attorneys general from Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Wisconsin and Washington D.C., joined Attorney General Clark in filing this lawsuit.