Attorney General Neronha, coalition sue Trump Administration to defend critical consumer protection efforts

Attorney General Neronha, coalition sue Trump Administration to defend critical consumer protection efforts

Published on Monday, December 22, 2025

Attorney General Peter F. Neronha today joined a coalition of attorneys general in suing the Trump administration to stop the complete defunding of the Consumer Financial Protection Bureau (CFPB), which has returned more than $21 billion improperly taken from over 205 million Americans throughout its 14-year existence. The CFPB's current acting director, Russell Vought, is attempting to completely defund the agency by refusing to request funding from the Federal Reserve, which will virtually guarantee the agency runs out of money in January 2026.

As Attorney General Neronha and the coalition allege in their complaint, this will have devastating impacts on consumers and severely disrupt states' consumer protection abilities, which rely on consumer complaints and data from the CFPB. Attorney General Neronha and the coalition argue that CFPB has a legal requirement to collect and process consumer complaints and share that complaint data with states, and that Director Vought's actions violate the law and the Constitution. The lawsuit seeks a court order preventing the administration from completely defunding the CFPB.

Established in the wake of the Great Recession, the CFPB is an independent agency funded entirely by the Federal Reserve focused on regulating financial institutions and products to protect consumers. The CFPB writes and enforces rules to regulate financial institutions, collects critical economic data, and fields millions of consumer complaints every year. In addition, the CFPB is the only federal agency authorized to supervise the nation's largest banks for their compliance with consumer financial protection laws.

Beyond its own consumer protection actions, the CFPB is legally mandated to provide vital information to states to aid their own consumer protection efforts. States rely on consumer complaints from the CFPB to investigate wrongdoing, secure refunds and restitution for consumers, and support their own litigation against financial institutions. For example, the CFPB collects demographic and geographic lending data under the Home Mortgage Disclosure Act, which states use to protect homebuyers from discriminatory lending

States also regularly refer consumer complaints to the CFPB for further assistance. The CFPB has returned billions of dollars to consumers over junk fees, illegal debt collection, unfair mortgages, and predatory student loans, among other areas central to traditional consumer protection enforcement. The CFPB is not just a watchdog for consumers, but it is a critical partner in enforcement of state consumer protection laws as well. As Attorney General Neronha and the coalition argue, completely defunding CFPB will eliminate this important resource for resolving complaints and securing justice for cheated consumers.

In November, acting director of the CFPB Vought took a novel position that the agency can only be funded by the Federal Reserve's "profits," which he asserts are currently nonexistent. Vought therefore made the decision not to request any funding from the Federal Reserve, making it all but certain that the CFPB will run out of funding completely in January 2026.

Attorney General Neronha and the coalition argue that Vought's decision not to seek any funding for the CFPB is unlawful and unconstitutional. The CFPB has a legal obligation to provide states with consumer complaints - a duty it will not be able to fulfill without the necessary funds. The complaint argues that completely eliminating the CFPB's funding also violates the Separation of Powers principle, as the agency was established by Congress, which created the process for it to regularly receive funding from the Federal Reserve. Attorney General Neronha and the coalition are seeking a court order preventing the administration from carrying out its decision not to request any funds for the CFPB and ordering the agency to request funding from the Federal Reserve to fulfill its duties as required by the law.

Joining Attorney General Neronha in filing this lawsuit are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Wisconsin, and the District of Columbia.

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