The AGs claim that the administrations actions amount to a total dereliction of all mandatory statutory duties.
A coalition of 23 Democratic state attorneys general is urging a federal judge in Washington, D.C. to block the Trump Administrations efforts to shut down the Consumer Financial Protection Bureau (CFPB), arguing that doing so would harm consumer protection efforts across the country.
In a legal brief filed in support of a lawsuit brought by the National Treasury Employees Union (NTEU), the attorneys general claim that the administrations actions amount to a total dereliction of all mandatory statutory duties. A similar brief has also been filed in a separate lawsuit by the city of Baltimore, which makes similar allegations.
Legal battle over CFPBs future
The lawsuit, filed by the NTEU and several advocacy groups, seeks a court order requiring the CFPB to resume operations, arguing that halting the agencys work violates the Administrative Procedure Act.
Judge Amy Berman Jackson has ruled that no further changes be made to the agency until at least March 10, when she will hold an evidentiary hearing to review the case.
The Democratic attorneys general argue that shutting down the CFPB would severely impact consumer protection efforts, as many states rely on the agency for critical enforcement and investigative support.
Consumer protection concerns
According to the attorneys general, states depend on the CFPB for:
- Handling consumer complaints, which provide vital data for investigating fraud and abuse.
- Collaborating on investigations into predatory lending, deceptive financial practices, and fraud.
- Accessing mortgage lending data under the Home Mortgage Disclosure Act, which helps enforce fair lending laws.
- Distributing financial penalties already awarded to consumers through the CFPBs Civil Penalty Fund.
In the CFPBs absence, consumers will be left without critical resources, the brief states. Although some states have similar mechanisms in place, those mechanisms alone cannot replace the CFPBs vast nationwide complaint intake system overnight.
CFPBs fate is uncertain
While Jonathan McKernan, President Trumps nominee to head the CFPB, assured a Senate committee last week that the agency would continue to function, employees have been sent home, the headquarters hasbeen closed, and the CFPBs name has been removed from its windows.
This contradictory messaging has raised concerns among state officials, who say the sudden disruption is already affecting ongoing investigations and enforcement actions.
The attorneys general represent New York, California, Illinois, Massachusetts, New Jersey, and 18 other states that have historically worked closely with the CFPB to enforce consumer protection laws.
With the future of the agency hanging in the balance, the courts upcoming March 10 hearing could determine whether the CFPB resumes its operations or remains effectively shuttered under the Trump Administration.
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Posted: 2025-03-12 21:34:02
