The Consumer Financial Protection Bureau (CFPB) is a federal agency that, up until a few weeks ago, policed some of the largest and most powerful financial and tech companies in America. It oversaw companies offering credit cards, mortgages, student loans, and other financial services, such as peer-to-peer (P2P) payment apps, payday loans, and buy now, pay later platforms.

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Congress created the CFPB in the wake of the financial system meltdown in 2008, which caused more than 8 million people to lose their jobs, almost four million to lose their homes, and the federal bailout of big banks. The CFPB was charged with preventing financial fraud and deceptive lending practices.

In February, the Trump administration instructed CFPB employees to stop working. The building was locked, employees were sent home, and many were told they were fired. A federal judge has prohibited mass firings at the agency until she can issue a final ruling on a lawsuit filed by employees.

The president appointed Russel Vought, who runs the Office of Management and Budget, as CFPB acting director. Vought also ordered a stop to most work and stated he would not request funding for the agency. Note: The CFPB is funded by the Federal Reserve, not taxpayers; Congress designed it that way to remove political influence.

“We virtually shut down the out-of-control CFPB, escorting radical left bureaucrats out of the building and locking the doors behind them,” Trump said.

Under Vought’s leadership, the CFPB has stopped all enforcement and supervision. The rulemaking process has been terminated. And rules already on the books are unlikely to be enforced. These include two new rules that require credit bureaus to remove all medical debt from credit reports (something that affected 15 million people) and limit overdraft fees for large banks to $5 (which would save bank customers an estimated $5 billion a year).

The CFPB is not pursuing new lawsuits nor supporting ones it already filed, leading to their dismissal (more on that below). Consumer complaints are not being addressed. And what happens to the restitution money already collected that was supposed to be returned to consumers harmed by illegal practices? No one knows.

Former CFPB Director Rohit Chopra, who was fired by the president on Feb. 1, told 60 Minutes the muzzling of his agency is welcome news to those it regulated. “They would want a situation where the agency is a lapdog, rather than a watchdog,” he said.

The CFPB was created despite the objections of nearly all Republican members of Congress and business leaders. Their assault on the consumer agency never stopped. They claimed the CFPB was anti-business, that it was following a political agenda, and that its rules (enacted after years of hearings and comment review) were “arbitrary and capricious.”

In 2024, the U.S. Supreme Court rejected a claim by payday lenders that the CFPB’s formation was unconstitutional. The payday-lending companies were unhappy with a CFPB rule that limited their ability to withdraw funds directly from borrowers’ bank accounts.

Getting Restitution for Victims

Since its inception in 2010, the CFPB has returned nearly $20 billion to nearly 200 million consumers harmed by big banks, credit bureaus, debt collectors, and predatory lenders. This relief included monetary compensation, principal reductions, and canceled debts. The bureau also levied $5 billion in civil monetary penalties.

In recent years, the CFPB has ordered:

• Wells Fargo to pay $3.7 billion for “widespread mismanagement” of auto loans, mortgages, and deposit accounts that affected more than 16 million accounts and resulted in “wrongfully foreclosed homes and illegally repossessed vehicles.”
• Navy Federal Credit Union, the largest credit union in the U.S.,  to pay back more than $95 million for charging “illegal overdraft fees” to active duty service members and veterans for ATM withdrawals and debit card purchases when their accounts had sufficient funds at the time of the transaction.
• Navient, a former student loan servicer, to pay $120 million for wide-ranging student loan failures. Navient was also banned from the student loan market.
• Equifax, one of the big three credit bureaus, to pay $15 million for failing to conduct “adequate investigations” when consumers disputed information in their credit reports. Equifax was ordered to bring its dispute resolution process into compliance with federal laws.
   

CFPB Forced to Halt Consumer Protection Work Already in Progress

Vought has ordered the CFPB to abandon enforcement cases started during the Biden administration against corporations that were suspected of causing significant financial harm to consumers. So far, the CFPB has filed motions to dismiss seven cases and to never pursue them again. The National Consumer Law Center compiled this list:

• Capital One: In its lawsuit, the CFPB alleged Capital One, the ninth largest bank in America, cheated millions of customers out of more than $2 billion in interest on savings accounts by obscuring other higher-interest accounts available to them.
• JPMorgan Chase, Bank of America, and Wells Fargo: The CFPB lawsuit accused the banks of “allowing fraud to fester on Zelle,” America’s most widely available peer-to-peer payment network. Customers of the three banks lost more than $870 million during the network’s seven-year existence due to the Zelle’s “shoddy safeguards,” the lawsuit alleged.
• Rocket Homes: The CFPB lawsuit claimed Rocket Homes paid illegal “kickbacks to real estate brokers and agents to steer homebuyers to Rocket Mortgage for loans.”
• Vanderbilt Mortgage and Finance: The CFPB sued Berkshire Hathaway’s Vanderbilt Mortgage & Finance (the largest lender for people buying mobile homes) for “pushing people into unaffordable loans” to purchase their manufactured homes and then piling on the penalties when those loans became delinquent.
• Pennsylvania Higher Education Assistance Agency: In its lawsuit, the CFPB alleged student loan servicer PHEAA was “illegally collecting on student loans that have been discharged in bankruptcy and sending false information about consumers to credit reporting companies.”
• CURO’s Heights Finance: The CFPB accused CURO Group, the installment lending conglomerate that owns Heights Holding Finance, of “illegal loan-churning practices that harvested hundreds of millions in loan costs and fees.” The CFPB alleged the company refinanced unaffordable loans to trap delinquent borrowers into continuous fee-laden debt.
• SoLo Funds: The CFPB charged this online lending platform with “deceiving borrowers and illegally extracting fees.” The company advertised zero-cost loans but deployed “digital dark patterns resulting in almost every borrower paying at least one fee,” the bureau said.

“The Trump Administration and Elon Musk are showing us exactly what it means not to have ordinary people protected by a strong Consumer Financial Protection Bureau—they are dismissing enforcement cases that sought to return billions to working families harmed by corporations accused of egregious conduct that violated the law,” said Lauren Saunders, NCLC’s associate director.

Why You Should Care

Consumer advocates are alarmed by how quickly the CFPB has been muzzled.

“The gravity of this attack on the CFPB cannot be overstated,” said Rich Dubois, executive director of the National Consumer Law Center. “Financial companies have shown time and time again that they cannot police themselves. The CFPB saves homes, stops fraud that ruins lives, and enforces key laws.”

Christine Chen Zinner, consumer policy counsel at Americans for Financial Reform, believes bad actors in the financial sector will assume they have “a free pass from the Trump administration to make life more expensive and less fair for families all over the country.”

At the Consumer Federation of America, Erin Witte, director of consumer protection, said acting director Vought’s “absolutely unprecedented” actions are “sending a really strong message to companies that want to cheat consumers, to go ahead and do it, because he’s not going to hold them accountable.”

“If you get harassed by a debt collector after hours tonight, and you decide to file a complaint with the CFPB, there’s no one monitoring that,” Witte said. “No one’s forwarding it to the debt collectors. No one is responding to the complaints that you file. Everything is on ice.”

Conflict of Interest

The CFPB was one of the agencies quickly targeted by Elon Musk and his Department of Government Efficiency (DOGE). On Feb. 7, Musk tweeted: "CFPB RIP" next to a tombstone emoji.

Musk has confirmed on numerous occasions that he wants to launch a peer-to-peer app called “X Payment.” The CFPB regulates P2P apps, so Musk might personally benefit from dismantling the agency that would oversee the rollout of X Payment.

Consumer advocates worry that Musk’s DOGE team may have access to proprietary data, including algorithms, used by potential competitors, that could give X Payment an unfair advantage.

As Sen. Elizabeth Warren (who came up with the idea for a consumer financial protection agency when she was a Harvard professor) said recently: “The cops have all been told to leave the field. That’s what Elon Musk has done. And I think that’s pretty alarming, and all of us need to push back on this. We want our financial cops back on the beat.”

Chen Zinner at the nonprofit Americans for Financial Reform told Checkbook: “Consumers are voters, too.” She encourages “everyday people” to talk to their members of Congress to “elevate this agency into the public consciousness” so that it becomes “a political liability for any member of Congress who thinks it’s okay to continue dismantling the CFPB.”

A Personal Note

I’ve reported on the CFPB since its creation. I’ve tracked rules from concept to proposal to final implementation. I’ve watched hearings. I’ve interviewed Richard Cordray, the CFPB’s original director, and many other CFPB attorneys and department heads. I’ve also spoken to consumers harmed by the illegal practices the CFPB cracked down on. I’ve written numerous Checkbook stories urging you to contact the CFPB if you feel you’ve been ripped off. Sadly, I can’t suggest that anymore.

This was an agency dedicated to eliminating fraud and deception in the financial marketplace. It worked to create a level playing field for all companies to compete fairly for your business. This not only protects you but also protects businesses that want to play by the rules but feel pressured to cut corners to compete against those that don’t.

I can’t think of another government agency with the CFPB’s return on investment. In 14 years, it spent about $9 billion and returned $20 billion to consumers. That would earn most business leaders a raise.