California Attorney General Rob Bonta, along with a coalition of 22 other state attorneys general, has filed a lawsuit challenging the Consumer Financial Protection Bureau's (CFPB) Acting Director's unlawful decision to withhold funding. This decision threatens to halt the CFPB's ability to perform its legally mandated functions, which include protecting consumers from unfair practices, enforcing anti-discrimination laws, and handling consumer complaints. The lawsuit, filed in the U.S. District Court for the District of Oregon, argues that the CFPB's Acting Director, Russell Vought, violated the Dodd-Frank Wall Street Reform and Consumer Protection Act by refusing to request the necessary funding from the Federal Reserve. This action could have severe consequences for consumers, as the CFPB has been a crucial enforcer and regulator, returning over $20 billion to Americans since its creation.
The Trump Administration's campaign to dismantle the CFPB has been ongoing since Bonta took office. The lawsuit highlights the Administration's disregard for the CFPB's critical role in protecting consumers and maintaining a fair financial marketplace. By withholding funding, the Administration sends a clear message that it prioritizes its own agenda over the well-being of American families and working individuals. Bonta emphasizes that this action impacts everyone, from those struggling with car loans and mortgage payments to those facing credit score errors.
The lawsuit argues that the CFPB's refusal to seek funding is ultra vires, contrary to the law, and arbitrary and capricious. The Dodd-Frank Act explicitly provides a funding mechanism for the CFPB to carry out its statutory responsibilities. These responsibilities include rooting out unfair practices, enforcing anti-discrimination laws, handling consumer complaints, enhancing financial education, researching consumer experiences, and monitoring financial markets for new risks. The attorneys general claim that the CFPB's inaction will harm consumers and prevent these essential functions from being performed.
The coalition of attorneys general, led by Bonta, includes representatives from New York, Oregon, New Jersey, Colorado, Arizona, Connecticut, Delaware, the District of Columbia, Hawai'i, Illinois, Maine, Maryland, Massachusetts, Michigan, Nevada, New Mexico, North Carolina, Rhode Island, Vermont, and Wisconsin. Bonta has been a vocal critic of the Trump Administration's efforts to shrink the CFPB's responsibilities and has submitted amicus briefs in related lawsuits, emphasizing the potential harm to California and the broader consumer protection landscape.
