Attorney General Matthew J. Platkin announced today that New Jersey is co-leading a lawsuit brought by a coalition of 22 attorneys general to stop the Trump Administration from defunding the Consumer Financial Protection Bureau (CFPB) in violation of federal law.
The Trump Administration is attempting to gut the agency by refusing to request any funding for the CFPB from the Federal Reserve, which will virtually guarantee the agency runs out of money in January 2026. This will have devastating impacts on consumers and severely disrupt States’ consumer protection efforts, which rely on consumer complaints and data from the CFPB. The lawsuit seeks a court order preventing the administration from completely gutting the CFPB.
“While consumers are facing an affordability crisis, the Trump Administration has spent the last several months currying favor with billionaires by trying to gut the CFPB and give unscrupulous businesses free reign to exploit and abuse consumers. It is unconscionable that the Trump Administration is trying to re-write federal laws to support their extreme crusade against consumer protection laws and ordinary consumers,” said Attorney General Platkin. “The CFPB is a critical partner in our work to keep costs down for consumers and protect them from predatory businesses. I am proud to stand alongside my colleagues as we continue to protect the CFPB, our residents, and their wallets.”
Established in the wake of the Great Recession, the CFPB is an independent agency funded entirely by the Federal Reserve and 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, CFPB is the only federal agency authorized to supervise the nation’s largest banks for their compliance with consumer financial protection laws.
The CFPB has returned more than $21 billion improperly taken from over 205 million Americans throughout its 14-year existence, and New Jersey and other States routinely work with and rely on the CFPB to protect consumers.
Beyond its own consumer protection actions, CFPB is legally mandated to provide vital information to states to aid their consumer protection efforts. States rely on consumer complaints from CFPB to investigate wrongdoing, secure refunds and restitution for consumers, and support their own enforcement actions against financial institutions. For example, CFPB collects demographic and geographic lending data under the Home Mortgage Disclosure Act, which States (including New Jersey) use to protect homebuyers from discriminatory lending.
States also regularly partner with the CFPB on large-scale, nationwide investigations. For example, New Jersey joined the CFPB and a bipartisan coalition of forty-nine states and the District of Columbia in a $2.1 billion dollar settlement with Ocwen Financial Corporation following an investigation into Ocwen’s mortgage servicing misconduct. This settlement returned billions of dollars to homeowners across the country and held Ocwen accountable for predatory foreclosures.
Moreover, in 2022, New Jersey, Pennsylvania, and Delaware also coordinated with the CFPB on a landmark investigation and settlement involving mortgage redlining practices by Trident Mortgage Company, which systematically and unlawfully denied home mortgages to minority applicants in New Jersey. The settlement would spur hundreds of millions of dollars in total lending in Camden-Philadelphia-Wilmington region.
The attorneys general argue that completely defunding the CFPB will eliminate this important resource for resolving complaints and securing justice for cheated consumers.
In November, the Trump Administration took the novel position that the agency can only be funded by the Federal Reserve’s “profits,” which he asserted are currently nonexistent. Vought has therefore made the decision not to request any funding from the Federal Reserve, making it all but certain that CFPB will run out of funding completely in January 2026.
The multistate lawsuit argues that the decision not to seek any funding for the CFPB is unlawful and unconstitutional. The attorneys general are seeking a court order preventing the administration from carrying out its decision not to request any funds for CFPB and ordering the agency to request funding from the Federal Reserve to fulfill its duties as required by law.
Attorney General Platkin co-led this lawsuit with Attorneys General from New York, Oregon, Colorado, and California. Joining them in filing the suit are Attorneys General from Arizona, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Rhode Island, Vermont, Wisconsin, and the District of Columbia.