Michigan AG sounds alarm after Trump administration fires consumer watchdogs

Michigan Attorney General Dana Nessel is pushing back against President Donald Trump’s ongoing plans to dismantle the Consumer Financial Protection Bureau.

LANSING—Michigan Attorney General Dana Nessel is warning about an increased risk of scams and fraudulent business practices in Michigan, should President Donald Trump’s administration carry out its plan to dismantle the Consumer Financial Protection Bureau (CFPB).

“My office can no longer rely on this once dependable and powerful partner to protect Michigan consumers,” Nessel said during a press conference in Lansing on Monday afternoon. “Their decision to strangle CFPB has a particularly pernicious impact for Michigan consumers.”

Nessel was joined at this week’s press conference by representatives from nonprofit advocacy groups, state Rep. Kelly Breen (D-Novi), and former CFPB Director Rohit Chopra—who was fired as the head of the federal agency in February, shortly after Trump began his second term.

Their main message?

The Trump administration’s efforts to defund, destaff, and eventually dismantle the CFPB—which is responsible for protecting consumers from fraud and deceptive practices—is posing a direct threat to the financial safety of millions of Michiganders.

“Whether you know it or not, the CFPB has had your back for years and delivered justice and billions of dollars to millions of defrauded consumers throughout the nation and in Michigan,” Nessel told reporters this week. “We simply, and literally, cannot afford to lose the CFPB.”

Understanding the CFPB

The CFPB is an independent agency that was created by Congress as a direct response to the 2008 financial crisis. And over the last several years, its staff has played a key role in stopping deceptive, unfair, and abusive business practices nationwide—namely by enforcing federal consumer financial laws and ensuring business practices are transparent, fair, and competitive.

That includes processing consumer complaints and enforcing federal rules for a range of financial institutions and businesses—like banks, mortgage lenders, credit card companies, student loan processors, payday lenders, credit reporting agencies, and debt collectors.

Since 2011, the agency has been credited with returning more than $21 billion back to American consumers in the form of direct monetary compensation, principal reductions, canceled debts, and other forms of consumer relief that has resulted from CFPB’s enforcement actions.

The federal agency also plays a particularly important role for Michigan, where prosecutors often struggle to levy charges under existing state-level consumer protection laws, Nessel said.

“That’s because the Michigan Consumer Protection Act, which is meant to protect Michigan consumers from a wide range of these deceptive business practices, has been fundamentally gutted by two past decisions of the Michigan Supreme Court,” Nessel explained this week.

According to the Center for American Progress, the federal agency has taken some form of enforcement action on more than 90,000 complaints from Michigan residents in 2023.

“This administration’s decision to destroy the CFPB will prevent consumers from being able to report issues of fraud or deception,” Nessel told reporters at this week’s press conference. 

Trump’s Dismantling Efforts

In January, Trump fired Chopra as the head of the CFPB and installed billionaire hedge fund manager and Secretary of the Treasury Scott Bessent as the agency’s new acting director.

And in February, the Trump administration ordered the federal agency to shut down its operations altogether—shuttering its offices in Washington DC, laying off about 200 employees, and telling the CFPB’s remaining 1,500-plus federal workers to stay home until further notice. 

“CFPB RIP,” Elon Musk wrote on social media on Feb. 7.

Legal and Local Resistance

Trump’s decision to gut the agency faced immediate resistance.

Shortly after the shutdown, Nessel joined a coalition of nearly two dozen state attorneys general in a lawsuit that seeks to prevent Trump and Musk from disbanding the CFPB. And a subsequent court order has temporarily halted, and in some areas reversed, Trump’s decisions.

According to the New York Times, the agency’s consumer response team was called back to work this month to tackle a backlog of 16,000 complaints, including from dozens of homeowners facing imminent foreclosures. But the larger issue of whether the Trump administration can essentially end the bureau by hollowing out its operations has yet to be decided by a judge. 

The issue is expected to return to a courtroom before the end of the month—and it’s emerging as a sort of test case to decide whether the Trump administration can unilaterally hobble government agencies or whether it will ultimately take an act of Congress to close the bureau.

Michigan’s Proactive Measures

Over the last few weeks, Nessel’s office has filed two amicus briefs to defend the bureau after the Trump administration told its employees to stop investigating deceptive and abusive conduct—including by dismissing a Michigan-based lawsuit that accused Rocket Homes of offering kickbacks to brokers and agents who referred homebuyers to Rocket Mortgage. 

Meanwhile, Nessel wants Michiganders to understand the CFPB’s role in protecting them from fraud and deceptive business practices—as well as the threats they now face under Trump 2.0. 

“Under the directive of Musk and the Trump administration, millions of Americans could be left without their consumer watchdogs,” Aaron Stephens, a spokesman for the Progressive Change Institute, also told reporters this week. “We really need to do everything we can to stop this.”

Chopra also warned that Michigan currently lacks “strong” state laws to protect consumers from fraud, and that gutting enforcement resources at the federal level would inevitably carry consequences for Michiganders who are victimized by scams and deceptive business practices. 

“We need to make sure that the dismantling of the police that oversee Wall Street and big financial companies does not occur,” Chopra said. “Defunding this law enforcement does nothing to protect citizens and only creates the conditions from another financial crisis.”

The Bottom Line

As Musk and the Trump administration continue to take a chainsaw to the federal government in search of tax breaks for billionaires, Michigan leaders like Nessel are taking a stand—not just against the Trump administration’s policies, but also in proactive defense of its residents.

Nessel’s vocal resistance at this week’s press conference also underscores a broader commitment to safeguarding consumer protections—a stance that she and other state officials argue is essential for maintaining trust and fairness in Michigan’s financial landscape.

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