Recently departed staffers maintain that the current administration is simply taking a new approach to reining in the agency. Rather than attack it head on, they say, it’s quietly draining the staff, resources, and authority it needs to be effective.
In April, acting CFPB leaders tried to lay off all but roughly 200 of the agency’s staff and reduce its day-to-day work to just a handful of legally required administrative tasks. The employees targeted included about 90 percent of the bank examiners, according to documents filed as part of a federal lawsuit brought by the CFPB’s employees union against the current administration. The remaining 50 would have been forced to relocate to Atlanta as a cost-cutting measure.
A judge’s order put those plans on hold, but on Aug. 15, a three-judge federal appeals court reversed the order, ruling in a 2-to-1 decision that there was no evidence that a smaller CFPB could not fulfill its legally required tasks and clearing the way for the layoffs. As of early September, however, the CFPB was still paying more than 1,600 full-time employees.
Its current leadership has indicated that the agency will have a limited purview. They have told staffers they plan to deprioritize examinations of nonbank lenders, including mortgage companies like Rocket Homes that now underwrite a majority of new loans in the U.S. A CFPB enforcement case against Rocket was dropped in February.
“The mortgage industry, nonbank lenders, fintech products. If there’s no cop on the beat, so to speak, it’s really scary to think about what could go wrong,” says Brad Lipton, who worked as an attorney for the CFPB for more than 11 years, through both Democratic and Republican administrations, before leaving in March 2025.
Bank examinations and supervision have also mostly been halted, according to court filings. And the CFPB has dropped almost two dozen civil lawsuits against companies it had been pursuing in federal court for a range of alleged misdeeds, including misleading consumers about savings account interest rates and failing to protect payment app users from fraud.
The cases include, for example, one against Capital One for allegedly deceiving customers about a low-interest savings account while marketing a nearly identical high-interest product, resulting in $2 billion in losses. Another dropped case had been brought against the operator of Zelle and the three banks that jointly own it for allegedly failing to implement effective safeguards against widespread fraud on its payment network. Consumers have reported losing at least $870 million through Zelle-enabled fraud and scams since 2017.
The CFPB has also terminated “negotiated settlements that let wrongdoers off the hook,” wrote Cara Petersen, the CFPB’s former acting enforcement director. Peterson quit in June in protest of what she called the “dismantling” of the agency’s enforcement arm and the “inexplicable dismissals of cases.”
Acting CFPB leaders have said they will continue to bring civil cases to protect military service members and veterans and to address what they describe as “actual tangible consumer harm and intentional discrimination.” For example, it is continuing to pursue a lawsuit against MoneyLion, the payday cash advance app that allegedly imposed excessive charges on military service members and their families in violation of the Military Lending Act and the Consumer Financial Protection Act.
