It’s been a challenging year for the consumer watchdog agency, as the Trump administration has tried to deny it funding and lay off most of its staff.
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This first year of the second Trump administration has been especially tough for the Consumer Financial Protection Bureau. The agency is supposed to investigate fraud, but instead, it’s mostly been dealing with work stoppages, layoffs and funding threats. NPR’s Stephan Bisaha reports on the yearlong attempt to dismantle the government watchdog.
STEPHAN BISAHA, BYLINE: The Consumer Financial Protection Bureau is probably best known for going after banking giants, like accusing Wells Fargo of doing things like illegally seizing homes and cars and fining the bank billions of dollars. But really, the agency’s watchdog duties cover a lot more.
LISA ROSENTHAL: Everybody that affects your wallet and your bank account.
BISAHA: Lisa Rosenthal’s 12-year career as an investigator and manager at the CFPB gives a sense of that scope.
ROSENTHAL: I focused on payday loan victims.
BISAHA: The auto finance market.
ROSENTHAL: The federal student loan market.
BISAHA: And debt collectors. And since it’s been created, the CFPB’s returned nearly $20 billion to consumers.
So it sounds like you take a lot of pride in the work you did.
ROSENTHAL: I take a lot of pride in the work that we did as a – you know, as an institution.
BISAHA: Congress created the Consumer Financial Protection Bureau in 2010 after the 2008 financial crisis. Basically, it took the consumer protection duties of other agencies and put them under one roof, along with new supervising and rule-making powers. But throughout the past year, the Trump administration has tried to dismantle the agency through layoffs and cutting off funds. To do that, Trump made one of the CFPB’s biggest critics the agency’s acting director, Russell Vought.
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RUSSELL VOUGHT: All they want to do is weaponize the tools of financial laws against basically small mom-and-pop lenders and other small financial institutions.
BISAHA: That was Vought on “The Charlie Kirk Show” last fall criticizing some of the agency’s staff. We reached out for comment from Vought’s office and the CFPB and have not heard back. One of Vought’s first actions was emailing workers and telling them to stop working. Bank examinations had been paused, cases were dismissed, regulations withdrawn, all while over the past year, the number of complaints against companies sent to the CFPB to investigate have nearly doubled. Lisa Rosenthal made a decision.
ROSENTHAL: This work that I had carried out for these decades and that I cared so deeply about, this was no longer that work.
BISAHA: She resigned in February. As for the workers who tried to stay, in April, 84% of them got layoff notices.
HELEN SHAW: Everyone was upset.
BISAHA: Helen Shaw was one of them.
SHAW: Colleagues were crying. It was very worrisome.
BISAHA: Shaw regulates interstate land sales, basically making sure property developers are telling the truth to potential buyers. Now, a district court judge has blocked those layoffs while the legal fight continues, and Shaw says she will not be forced out.
SHAW: I’m determined to stay because I really believe in the mission of helping individual consumers.
BISAHA: The CFPB gets funded from the Federal Reserve, so Vought’s recent plan to stop the agency was to refuse to ask for those funds. But in December, that same district judge ordered Vought to make the request, and he did. The judge also wrote in her decision, the agency is, quote, “hanging by a thread.” Some work like Shaw’s has resumed, but she says bank inspections have essentially been paused, and the threats to the agency’s future have not gone away.
SHAW: We’re still at risk of losing our existence, I think.
BISAHA: Even some critics that were never in favor of the CFPB don’t like how the Trump administration’s doing this.
NORBERT MICHEL: Well, I’m conflicted.
BISAHA: Norbert Michel runs the Cato Institute’s Center for Monetary and Financial Alternatives. And, yeah, he thinks the CFPB should not exist, that it’s redundant. But he also thinks Congress – not the administration – should be the one dismantling the CFPB, and he’s concerned there isn’t any legislation instructing other agencies to fill in the consumer protection gap.
MICHEL: Now you have a lot of those things that are not being done, so that gets me a little bit nervous.
BISAHA: He does say there are still state and local agencies enforcing consumer protection laws. But Helen Shaw says weakening CFPB goes against one of President Trump’s priorities.
SHAW: We’re the agency to help consumers with the affordability crisis.
BISAHA: One of Trump’s affordability proposals is capping credit card interest rates. Shaw says enforcing that would naturally be the CFPB’s job.
SHAW: It’s confusing, right? – because they’re stating that they’ll pursue ways to alleviate the affordability crisis for families, yet we’re not fully functional right now.
BISAHA: And those early court actions that protected the CFPB from things like layoffs, those were just temporary. The legal battle that could decide the fate of the agency is likely to be long and drawn out – a battle Shaw calls existential.
Stephan Bisaha, NPR News.
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