Attorney General Peter F. Neronha has joined a group of state attorneys general in filing a lawsuit against the Trump administration over the decision to halt funding for the Consumer Financial Protection Bureau (CFPB). The CFPB, which has operated for 14 years, has returned more than $21 billion to over 205 million Americans.
The lawsuit responds to actions by Russell Vought, the current acting director of the CFPB, who has declined to request funding from the Federal Reserve. This move is expected to deplete the agency’s funds by January 2026. According to Attorney General Neronha and his colleagues, this would severely affect consumer protection efforts and disrupt states’ ability to use consumer complaint data provided by the CFPB.
“Completely defunding CFPB will eliminate this important resource for resolving complaints and securing justice for cheated consumers,” said Attorney General Neronha and the coalition in their complaint.
The CFPB was created after the Great Recession as an independent agency funded by the Federal Reserve. It regulates financial institutions, collects economic data, handles millions of consumer complaints annually, and supervises large banks for compliance with consumer protection laws. States depend on information from the CFPB to investigate wrongdoing, secure restitution for consumers, and support legal action against financial institutions.
Vought’s recent position is that funding should only come from Federal Reserve profits, which he claims are currently unavailable. As a result, he chose not to seek any funds for 2026 operations. Attorney General Neronha and other attorneys general argue that this action is unlawful and unconstitutional because it prevents the CFPB from fulfilling its legal obligation to provide states with consumer complaints data.
They further claim that eliminating funding violates Congress’s intent when it established a regular process for funding through the Federal Reserve. The lawsuit seeks a court order requiring the administration not only to continue requesting funds but also ensuring that CFPB can carry out its duties as mandated by law.
Other attorneys general joining Rhode Island in this lawsuit represent Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Vermont, Wisconsin and Washington D.C.
