California Attorney General Rob Bonta has aligned with 23 other attorneys general to file an amicus brief in the case of Mayor and City Council of Baltimore v. Consumer Financial Protection Bureau. The lawsuit challenges actions by the Trump Administration aimed at dismantling the Consumer Financial Protection Bureau (CFPB). The coalition argues that closing down the CFPB would severely impact consumer protections across the nation, placing undue pressure on state agencies to fill the regulatory void.
Attorney General Bonta emphasized, "The CFPB was created to protect consumers from being taken advantage of by corporations. As the backbone of federal consumer financial protections, the CFPB is a force multiplier for California’s consumer protection efforts, working to protect consumers from fraud, abuse, and unfair business practices and returning over $20 billion to Americans since its creation."
The establishment of the CFPB followed Congress's examination of the 2008 financial crisis. The crisis was partly attributed to inadequate federal oversight on consumer protection issues. Since its inception, the CFPB has collaborated with state attorneys general and banking regulators to safeguard consumers against fraudulent practices while ensuring fair competition in financial markets.
Recent moves by the Trump Administration have targeted weakening or eliminating CFPB operations. These include suspending agency work, terminating employees on probationary status, and ceasing funding requests from the Federal Reserve. Such measures are perceived as attempts to dismantle programs mandated by federal law.
The amicus brief highlights several consequences of these actions:
- Ongoing harm to consumer welfare and state enforcement capabilities.
- Absence of oversight over major national banks.
- Increased burden on state agencies for consumer protection.
One critical function at risk is the CFPB’s consumer-complaint system, which processes about 25,000 complaints weekly regarding financial products and services. This system helps prioritize cases where consumers face imminent risks like home foreclosure.
Furthermore, without CFPB oversight, large banks such as JPMorgan and Wells Fargo may reduce compliance with consumer protection laws, potentially harming both consumers and competing smaller banks.
Attorney General Bonta joins his counterparts from New York, New Jersey, District of Columbia, Arizona, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, North Carolina Oregon Rhode Island Vermont Washington Wisconsin in this legal effort.
A copy of the amicus brief is available for public access.