State AGs Say CFPB Strategic Plan Undermines Consumer Protection

The attorneys general of 23 states and the District of Columbia urged CFPB Acting Director Russell Vought to revise his draft Strategic Plan for fiscal years 2026 through 2030, saying that it undermines the agency's statutory obligations and leaves consumers with less protection and fewer avenues for relief.

In a letter responding to the CFPB's request for comments, the attorneys general said that the draft plan's goal of eliminating what it called non-essential roles would actually gut the agency's workforce. They said proposed cuts would reduce the supervision team from 72 to one person and shrink enforcement staff from 254 to 50.

The attorneys general argued that the plan's vague goal of minimizing duplicative supervision could cause the CFPB to abandon its legally mandated supervisory role. They emphasized that state regulators and prudential regulators cannot serve as substitutes because states lack authority over national banks, and prudential regulators focus on institutional safety rather than consumer protection. The attorneys general raised additional concern about the plan's shift away from supervising nonbank entities, which are a growing presence in consumer financial markets and, for many product categories, have no other federal regulator overseeing them.

On enforcement, the attorneys general contended that the plan threatened the longstanding federal-state enforcement partnership. They argued that characterizing joint state-federal actions as duplicative is legally and factually incorrect, and that withdrawing from such partnerships would leave consumers in under-resourced states particularly vulnerable. They noted that the CFPB's 2025 dismissal of 22 enforcement actions put more than $3.5 billion in potential consumer relief at risk.

On civil penalties and the enforcement system, the attorneys general pushed back on the plan's stated preference for direct consumer redress over civil penalties, noting that penalty funds are themselves a mechanism for compensating harmed consumers and funding financial literacy programs. They also expressed concern about the plan's intention to remove undefined "improper submissions" from the consumer complaint database, warning that doing so could violate federal records retention law and deprive states of information relevant to their own investigations.