Virginia Attorney General (AG) Jay Jones has joined an ongoing lawsuit by 23 Democratic AGs challenging Consumer Financial Protection Bureau (CFPB) Acting Director Russell T. Vought’s interpretation of the CFPB’s statutory funding mechanism that would leave the agency without operating funds.

The AG litigation seeks to compel the CFPB to request funding in order to restore consumer-protection resources, many of which state AGs rely upon. A hearing on the AGs’ motion for partial summary judgment is set for March 12 — just weeks before the CFPB’s current funding is set to run out.

For businesses, especially those offering consumer financial products or services in the Commonwealth, this decision represents another signal of increased regulatory and enforcement risk in Virginia compared to the prior Republican AG Jason Miyares’ stance.

The Funding Fight

Under the Dodd-Frank Act, the CFPB is funded “from the combined earnings of the Federal Reserve System” based on the CFPB director’s determination of the amount “reasonably necessary to carry out” the CFPB’s responsibilities. The dispute centers on what the phrase “combined earnings” means.

Vought’s argument — supported by a memorandum opinion from the Office of Legal Counsel — is that “combined earnings” refers to the Federal Reserve’s profits, and that if the Federal Reserve has no profits, then it cannot transfer funds to the CFPB. Because the Federal Reserve’s costs have exceeded its revenue every year since 2022, Vought contends that the only available funding is through congressional appropriations that have not materialized. The AGs disagree with Vought’s interpretation which, in their view, is a strained construction and backdoor attempt to shut down consumer-protection functions at the CFPB.

The AGs are concerned that several nationwide consumer-protection tools maintained by the CFPB and shared with the states will no longer be available. These tools include the Consumer Response System, an online database of consumer complaints to which regulated entities must respond, as well as Home Mortgage Disclosure Act data compiled by CFPB staff and used to investigate alleged discriminatory lending practices.

Implications for Consumer-Protection Efforts in Virginia and Beyond

Jones’s decision to join this ongoing litigation just over a month after taking office signals his intent to join lawsuits brought by Democratic AGs to support his policy objectives and agenda — especially around topics involving consumer protection.

While Jones is joining a lawsuit by Democratic AGs, an amended complaint reflecting Virginia’s role as a plaintiff state now alleges that Virginia shares many of the same harms asserted by the other AGs. For instance, in 2024, the Consumer Response System received 63,229 complaints from Virginians, and companies reported providing $2.5 million to Virginians in response to those complaints. The Consumer Protection Section in Virginia’s AG’s Office relies on the Consumer Response System for information about investigatory targets and to monitor consumer complaint trends. The loss of the tool could impact enforcement efforts.

Given Jones’ background in the Consumer Protection division of the Washington, D.C., AG’s Office, it is no surprise that his policy objectives elevate consumer protection issues. Immediately upon assuming office, Jones reorganized existing sections to establish a new Division of Public Advocacy comprising the Consumer Protection Section, Insurance and Utilities Regulation Section, and Office of Civil Rights, demonstrating his focus on matters affecting Virginia’s consumers.

Why It Matters

Jones’s decision to join the multistate effort to protect CFPB funding signals that Virginia is now aligned with other Democratic AGs and will likely take a more aggressive stance on consumer financial protection, UDAAP, and fair lending, including an increased likelihood of investigations and multistate actions when there is the perception that federal regulatory enforcement is insufficient. In this environment, proactively strengthening compliance programs, complaint management, and fair-lending controls is the most effective way to mitigate regulatory, litigation, and reputational risk.

Troutman Pepper Locke State Attorneys General Team

	Ashley Taylor – Co-leader and Firm Vice Chair Ashley is co-leader of the firm’s nationally ranked State Attorneys General practice, vice chair of the firm, and a partner in its Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He helps his clients navigate the complexities involved with multistate attorneys general investigations and enforcement actions, federal agency actions, and accompanying litigation.
	Clay Friedman – Co-leader Clay co-leads the firm’s State Attorneys General practice and is nationally ranked by Chambers USA for AG Government Relations and in Best Lawyers for Advertising Law. He has dedicated his entire career to state attorney general and federal work, serving for nearly a decade in a senior role and more than 25+ years in private practice. Clay focuses his practice on helping industry-leading companies mitigate the risks associated with state and federal regulatory investigations and associated litigation.
	Chris Carlson Chris advises clients on regulatory, civil, and criminal investigations and litigation. With a background as an assistant attorney general, he provides practical guidance to clients with matters involving state attorneys general and federal regulatory agencies.
	Lauren Fincher Lauren has vast experience handling state attorneys general investigations, navigating complex regulatory compliance matters, and providing strategic counsel in enforcement actions across various industries. She helps clients manage high-stakes regulatory matters and guides them through complex legal landscapes.
	Stephen Piepgrass Stephen leads the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, representing clients in single and multistate enforcement actions, including inquiries and investigations, as well as litigation involving state attorneys general and other state and federal governmental enforcement bodies. He has significant experience handling actions with federal agencies, including the CFPB and FTC, as well as single plaintiff and class action litigation for clients in highly regulated sectors such as financial services, health care, pharmaceutical, and education.
	Michael Yaghi Mike handles high-profile state attorneys general, FTC, and CFPB investigations by advising clients through these complex government inquiries. He assists clients through the entire life cycle of investigations, from regulatory enforcement through formal litigation.
	Matthew J. Berns Drawing on his experience in senior leadership roles in the New Jersey Attorney General’s and Governor’s Offices and as a trial attorney for the U.S. Department of Justice, Matt provides an insider’s perspective when guiding clients through complex government investigations, litigation, and other actions.
	Samuel E. “Gene” Fishel Gene is a former regulator with two decades of experience who has overseen state privacy and cybersecurity regulation enforcement, led national, multistate attorneys general privacy investigations, and prosecuted computer crimes at the state and federal levels. He has served at the forefront of state attorney general and federal enforcement, and utilizes this experience to proficiently represent client interests.
	Jeff Johnson Jeff helps clients navigate complex regulatory and litigation challenges with local, state, and federal authorities. His clients benefit from his decade of broad litigation experience, understanding of emerging state and federal regulatory issues, and strong relationships with attorneys general across the U.S. In addition to handling cases from trial through state or federal appeals, Jeff serves as amicus counsel in advancing legal rules to support his clients’ vital interests.
	Jay Myers Jay assists clients in heavily regulated industries, including health care, energy, insurance, emerging industries, and data privacy. He provides both regulatory legal advice and government relations strategies. Jay’s past and current clients include Fortune 10 companies, startups, nonprofits, industry associations, and advocacy groups. Recognizing that state government matters are often complex and multifaceted, he utilizes regulatory guidance, government advocacy, or both in tandem to deliver tailored solutions for each client’s unique needs.
	Zoe Schloss Zoe represents clients in litigation and government investigations. As former deputy attorney general for the Delaware Department of Justice, she is an experienced litigator who understands the enforcement priorities that impact her clients. Zoe works with individuals and corporate entities in highly regulated industries, including financial services, health care, and energy.
	Jessica Birdsong Jessica is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, magna cum laude, where she served as associate articles editor of the Journal of Law & Technology.
	Nick Gouverneur Nick is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. He received his J.D. from the University of Illinois College of Law, where he served as a member of the Journal of Law, Technology & Policy.
	Troy Homesley Troy is an accomplished litigator who has represented and defended clients across a wide range of complex, high-stakes disputes at both the trial and appellate levels. He has represented technology companies, business executives, law firms, investment funds, high-ranking federal officials, international non-profits, and asylum seekers. Troy draws on his broad litigation experience to advise clients before litigation arises, while claims are pending or threatened, and leading up to and through trial and appeals.
	Namrata Kang Namrata (Nam) is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. She routinely advises clients on a wide variety of state and federal regulatory matters, with a particular emphasis on state consumer protection laws relating to consumer financial services and marketing and advertising. Nam’s experience transcends multiple industries, including financial services, telecommunications, media, and sports betting.
	Michael Lafleur Michael is an associate in the firm’s Regulatory Investigations, Strategy, and Enforcement Practice Group. Based out of the firm’s Boston office, Mike has deep experience in litigation, investigations, and other regulatory matters involving state-level regulators and state attorneys general.
	Philip Nickerson Philip represents clients in sectors such as financial, tech, real estate, and energy in a range of litigation matters. He is experienced in matters involving trade secrets, government investigations, commercial contracts, construction and product defect.
	Lane Page Lane specializes in federal and state regulatory investigations and complex civil litigation. He focuses on representing financial institutions and other businesses, with a particular emphasis on consumer protection and fair lending issues.
	Dascher Pasco Dascher is an attorney within the Regulatory Investigations, Strategy, and Enforcement practice, based in the Richmond office. She joined our firm after working in personal injury and medical malpractice for a Virginia trial law firm. Dascher brings varied legal experience to the firm with strong litigation and regulatory strategy capabilities.
	Kyara Rivera Rivera Kyara is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, cum laude, where she served as publications and online editor of the Public Interest Law Review.
	Timothy Shyu Timothy is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group.
	Trey Smith Trey focuses his practice on representing and advising regulated utilities before state public utility commissions. He routinely helps clients obtain certificates of public convenience and necessity for transmission infrastructure. In this role, Trey works with his clients’ subject-matter experts to manage administrative proceedings, including by preparing initial filings; responding to discovery requests; drafting rebuttal testimony; and litigating any disputed issues.
	Daniel Waltz Dan helps clients navigate all aspects highly regulated relationships between industry participants and federal, state and local governments. Whether engaging with regulators, negotiating transactions or representing clients in the courtroom, he delivers solutions that help his clients achieve their strategic goals.
	Cole White Cole is a member of the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) group. He has a decade of experience working in the attorney general community, having joined the firm from the Wyoming Office of the Attorney General, where he was assistant attorney general.
	Stephanie Kozol Stephanie is Troutman Pepper Locke’s senior government relations manager in the state attorneys general department.