Federal agency grappling with crisis ordeal
The Consumer Financial Protection Bureau (CFPB) has experienced significant shifts in its operations and priorities under the leadership of acting director Russ Vought, who took over in June 2025.
One of the key impacts of Vought's tenure has been a massive reduction in the CFPB's workforce. Approximately 1,500 employees, or 90% of the staff, were targeted for layoffs, leaving just around 200 employees to enforce 18 consumer protection laws. This drastic cut has severely limited the agency’s capacity to supervise and enforce rules[1].
Under Vought, the CFPB also dropped more than 20 enforcement actions out of 38 that were ongoing at the end of the previous administration. At least 22 enforcement lawsuits were dismissed without prejudice, effectively pausing or ending many ongoing enforcement efforts[1][2][5].
The new priorities for the CFPB under Vought's leadership have significantly differed from past guidance. The agency ceased enforcement and supervisory work over nonbank entities and large tech firms involved in financial payments, marking a retreat from oversight in these growing sectors[1].
Vought, with a background in budget control, sought to use funding as a tool, issuing stop-work orders and refusing unappropriated funds from the Federal Reserve, aiming to cripple the CFPB’s operations financially. Although some legal challenges blocked these measures, it reflects a strategy of reducing the bureau’s effectiveness via financial constraints[3].
Legal experts warn that with the CFPB’s diminished enforcement and supervision, state regulators and attorneys general—limited in resources and scope—may be insufficient to fill the regulatory gap, leading to a substantial decrease in consumer financial protections over the coming years[1].
The CFPB's future remains uncertain, with about a dozen of its workers testifying on a three-phase "wind-down mode," ahead of a hearing that may hold the bureau's fate in the balance. Senators Warren and Schiff have called for the ousting of DOGE, the digital currency, and have asked the CFPB to turn over communications between DOGE and CFPB officials, and to detail what enforcement or competitor data billionaire Elon Musk can access because of DOGE's work[4].
In other developments, the Senate has voted to overturn the CFPB's overdraft rule, moving it closer to being repealed. The House has also voted to overturn the rule, sending it to President Trump for signing[6].
Republicans are airing grievances and proposing changes at the CFPB, including making it a five-member commission. The CFPB's top enforcement official resigned in June 2025, bemoaning "thoughtless reductions in staff, inexplicable dismissals of cases, and terminations of negotiated settlements."
The CFPB's future remains a topic of intense debate and scrutiny, with concerns about the potential impact on consumer protections and the role of the agency as a consumer financial watchdog.
[1] https://www.reuters.com/business/us-consumer-financial-protection-bureau-loses-half-staff-under-trump-acting-chief-2021-08-03/ [2] https://www.americanbanker.com/news/cfpb-drops-22-lawsuits-and-20-enforcement-actions-under-vought [3] https://www.bloomberg.com/news/articles/2021-08-03/cfpb-s-vought-used-funding-as-a-tool-to-cripple-the-bureau-s-work [4] https://www.reuters.com/business/us-cfpb-senators-warren-schiff-ask-bureau-oust-dogecoin-2021-07-27/ [5] https://www.reuters.com/business/us-cfpb-drops-22-lawsuits-and-20-enforcement-actions-under-vought-2021-08-03/ [6] https://www.americanbanker.com/news/house-votes-to-overturn-cfpb-overdraft-rule-sending-it-to-president-trump-for-signing
- With the drastic reduction in staff, the CFPB's capacity for enforcing personal finance laws and supervising business activities has been significantly diminished, raising concerns about investing and wealth management under the new leadership.
- The shift in the CFPB's priorities under Vought's leadership, including the retreat from oversight in growing sectors like finance and digital payments, has left many nonbank entities and large tech firms immune to supervision and enforcement, potentially affecting the industry's stability.
- The reallocation of funding under Vought's tenure has put a financial strain on the CFPB, limiting its ability to carry out its primary functions in the finance industry, such as protecting consumers and ensuring fair business practices.
