Attorney General Peter F. Neronha has aligned with a coalition of 23 attorneys general to challenge the Trump administration and Elon Musk's efforts to defund and dismantle the Consumer Financial Protection Bureau (CFPB). The CFPB, an independent agency, is responsible for overseeing major financial institutions to ensure compliance with federal consumer protection laws. Since its inception, the bureau has assisted millions of Americans by helping homeowners avoid foreclosure, eliminating unnecessary bank fees, and returning over $20 billion to consumers.
The coalition submitted an amicus brief in the U.S. District Court for the District of Maryland, asserting that disbanding the CFPB would severely impact consumer protection and enforcement of related laws. Attorney General Neronha stated: “Fraud, scams, and financial crimes are everywhere these days, and this Administration seems to want to make it easier for bad actors to swindle Americans." He emphasized the importance of safeguarding American consumers from predatory practices and warned against deregulation reminiscent of conditions leading up to the Great Recession of 2008.
On February 9th, directives were issued by the Trump administration instructing the CFPB to halt all ongoing activities and refrain from initiating new investigations. Established in 2011 post-Great Recession, the CFPB was designed to enforce consumer protection statutes. It has collaborated extensively with state attorneys general on issues like banking practices, student loans, mortgages, auto lending, among others. With recent administrative changes under Trump's directive, oversight on major banks' compliance with essential consumer protections has diminished.
The coalition's brief argues that terminating the CFPB could hinder consumers from reporting fraud or deception cases while reducing regulatory oversight on large banks could lead them towards lax compliance—a scenario reminiscent of pre-financial crisis years.
Joining Neronha are attorneys general from Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine Maryland Massachusetts Michigan Minnesota Nevada New Jersey New Mexico New York North Carolina Oregon Vermont Washington Wisconsin including D.C., reflecting a widespread concern across states regarding potential negative impacts on consumers due to reduced regulatory enforcement.