Attorney General Bonta Doubles Down on CFPB Support

Urges court to keep order that will protect the agency from further dismemberment 

OAKLAND — California Attorney General Rob Bonta today announced joining a coalition of 23 attorneys general in submitting an amicus brief in National Treasury Employees Union v. Vought, a lawsuit challenging the Trump Administration’s efforts to dismantle the Consumer Financial Protection Bureau (CFPB). In February, Attorney General Bonta submitted an initial amicus brief in this case, which was followed by the court granting a robust preliminary injunction, a decision that prevents the Trump Administration from moving forward with mass layoffs while litigation in this case proceeds. The Trump Administration has now appealed the preliminary injunction, asking the court to strike it down to allow further dismantling of the CFPB to continue. In today’s amicus brief, the attorneys general argue that shuttering the CFPB would cause catastrophic harm to consumer protections nationwide. These actions by the Trump Administration trample over the decision of Congress to create the agency, violating the separation of powers under the U.S. Constitution. 

“Further demolishing the CFPB, the top cop protecting Americans from exploitation, would put families nationwide at a stark disadvantage when standing up to big businesses who aren’t playing by the rules,” said Attorney General Bonta. “I urge the court to keep in place the order preventing the Trump Administration from issuing mass layoffs at the CFPB — its loss would have devastating and deep implications for California, and the financial well-being of households across the nation."

In the brief, filed in the United States Court of Appeals for the District of Columbia Circuit, the attorneys general argue the dismantling of the CFPB will cause irreparable harm to consumers and the states’ own consumer protection enforcement efforts, leave no oversight over large national banks, and will rapidly and substantially increase the burden on state agencies to protect consumers from conduct regulated by the CFPB. The loss of the CFPB’s partnership has concrete and widespread implications: from the sharing of complaints and trend data, to providing training, to partnering on joint investigations and litigations, the CFPB has been a force multiplier for California’s consumer protection efforts.

Background
 
After examining the fallout of the 2008 financial crisis, Congress concluded the crisis resulted in part from the failure of federal banking and other regulators to address significant consumer protection issues detrimental to both consumers and the safety and soundness of the banking system. In direct response to these events, Congress established the CFPB and tasked it with enforcing numerous federal consumer protection statutes and enacting regulations to further these efforts. For over a decade, the CFPB has served as an invaluable partner to state attorneys general and state banking regulators, both by working to protect consumers against fraudulent and abusive practices and by advancing a fair and level playing field in consumer financial markets by issuing regulations under federal law. 
 
In the last months, the Trump Administration has taken a series of actions intended to debilitate the CFPB, including issuing a suspension of work across the agency, terminating probationary employees, and announcing a decision not to draw additional funding from the Federal Reserve. These actions appear to be part of a unilateral effort to permanently shut down the agency, including programs and operations mandated by federal law. Most recently, the Trump Administration issued reduction in force notices to 90% of the CFPB’s workforce — a move that was swiftly blocked by the courts.

Attorney General Bonta has been a vocal supporter of CFPB. In February, Attorney General Bonta submitted an amicus brief in another case, Mayor and City Council of Baltimore v. Consumer Financial Protection Bureau. 
 
In filing the brief, Attorney General Bonta joins the attorneys general of New York, New Jersey, the District of Columbia, Arizona, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico North Carolina, Oregon, Rhode Island, Vermont, Washington, and Wisconsin.

A copy of the brief can be found here.