New Jersey co-leads multistate lawsuit to block Trump administration effort to defund CFPB
TRENTON, N.J. — New Jersey is co-leading a multistate lawsuit seeking to block the Trump Administration from defunding the Consumer Financial Protection Bureau, Attorney General Matthew J. Platkin announced.
The lawsuit, filed by a coalition of 22 attorneys general, challenges what they describe as an unlawful attempt by the administration to strip funding from the CFPB by refusing to request money from the Federal Reserve. State officials said the move would effectively force the agency to run out of funds in January 2026, undermining consumer protection efforts nationwide.
The suit asks a court to prevent the administration from carrying out its plan and to require the CFPB to request funding as mandated by federal law.
“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,” Platkin said. “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.”
Created after the Great Recession, the CFPB is an independent agency funded through the Federal Reserve and tasked with regulating financial institutions and consumer financial products. The bureau enforces consumer protection rules, collects economic data and handles millions of consumer complaints annually. It is also the only federal agency authorized to supervise the nation’s largest banks for compliance with consumer financial protection laws.
Since its creation, the CFPB has returned more than $21 billion to more than 205 million Americans, according to state officials. New Jersey and other states routinely rely on the agency’s data and complaint system to investigate misconduct, secure refunds and restitution, and support enforcement actions.
States also use CFPB-collected data under the Home Mortgage Disclosure Act to identify discriminatory lending practices, officials said. New Jersey has partnered with the CFPB on several major investigations, including a $2.1 billion multistate settlement with Ocwen Financial Corporation over mortgage servicing misconduct and a 2022 settlement involving Trident Mortgage Company related to mortgage redlining in New Jersey.
The attorneys general argue that eliminating CFPB funding would severely disrupt these efforts and remove a key resource for consumers seeking relief from unfair or deceptive practices.
In November, the Trump Administration asserted that the CFPB could be funded only through Federal Reserve “profits,” which it claimed were unavailable. As a result, officials said no funding request was made, putting the agency on track to exhaust its funds.
The lawsuit contends that the decision not to seek funding is unlawful and unconstitutional.
Platkin is co-leading the case with attorneys general from New York, Oregon, Colorado and California. 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 also joined the suit.
