Attorney General Kwame Raoul has joined a group of attorneys general in filing a lawsuit against the Trump administration over the decision to halt funding for the Consumer Financial Protection Bureau (CFPB). The lawsuit aims to prevent what the coalition describes as an unlawful attempt to dismantle the agency by refusing to request funds from the Federal Reserve, which would result in the CFPB running out of money by January 2026.
The CFPB, established after the Great Recession, is responsible for regulating financial institutions and protecting consumers. Over its 14-year history, it has returned more than $21 billion to consumers who were defrauded and taken action against predatory lending practices. The agency is funded entirely through requests made to the Federal Reserve.
Attorney General Raoul emphasized the significance of the bureau’s work. “The CFPB serves a uniquely important role as the federal government’s dedicated watchdog for consumer protection in financial products and services,” Raoul said. “Consumers will ultimately pay the price if the CFPB’s oversight is removed. I stand with my fellow attorneys general to oppose the illegal attempts to dismantle this critical watchdog.”
The lawsuit claims that Russel Vought, acting director of the CFPB, violated legal and constitutional obligations by not seeking any new funding for the agency. According to Raoul and other attorneys general, this move would prevent states from accessing crucial consumer complaint data used in investigations and litigation involving financial institutions.
States rely on information collected by the CFPB—including data under laws such as the Home Mortgage Disclosure Act—to protect homebuyers from discriminatory lending practices and support their own enforcement actions. The loss of this resource could hinder efforts to secure refunds or restitution for affected consumers.
The coalition also argues that ending funding for the bureau undermines Congress’s authority since Congress established both its existence and its funding mechanism via regular transfers from the Federal Reserve.
Raoul’s office has previously worked with federal authorities on cases involving deceptive debt settlement schemes and investigations into student loan servicers like Navient and mortgage companies such as Nationstar Mortgage (Mr. Cooper).
Attorneys general from Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont and Wisconsin have joined Illinois in pursuing legal action.