Employees at the nation's consumer financial watchdog say it's become
toothless under Trump
[July 16, 2025] By
KEN SWEET
NEW YORK (AP) — The lights are on at the Consumer Financial Protection
Bureau across the street from the White House, and employees still get
paid. But, in practice, the bureau has been mostly inoperable for nearly
six months. CFPB employees say they essentially spend the workday
sitting on their hands, forbidden from doing any work by directive from
the White House.
The bureau is supposed to be helping oversee the nation’s banks and
financial services companies and taking enforcement action in case of
wrongdoing. Instead, the situation is Kafkaesque: the main function
seems to be undoing the rulemaking and law enforcement work that was
done under previous administrations, including in President Donald
Trump’s first term.
American consumers can no longer look to the bureau for help when it
comes to their checking account, credit card, payday loan, auto loan or
mortgage. Trump has neutered the watchdog, employees say, the
culmination of a yearslong effort by Republicans who felt the agency
often went overboard in its efforts.
One current employee, who spoke on condition of anonymity because the
directive forbids staffers from speaking publicly about their jobs, said
outsiders would be amazed at how little work is being done. Employees
are reluctant even to talk to one another, out of fear that a
conversation between two employees would be considered a violation of
the directive.
Another employee described the drastic shift in mission, from trying to
protect consumers to doing nothing, as “quite demoralizing.”
To gain an understanding of what is happening inside the CFPB, The
Associated Press spoke with 10 current and former employees, as well as
bankers and policymakers who used to interact with the bureau nearly
every day but now say their emails and voicemails go into a black hole.
The agency’s press office doesn’t respond to emails.
Different approaches
Bureau rank-and-file employees and former CFPB officials say they
expected the bureau to keep doing its work under “Trump 2.0,” although
likely in a more restrained fashion. In Trump’s first term, his
then-director Kathy Kraninger took a lighter approach to supervision and
enforcement, but still some of the biggest financial settlements in the
bureau’s history took place during that time.
President Joe Biden’s choice to run the bureau, Rohit Chopra, took an
expansive view of its authority, targeting profitable practices by banks
such as overdraft and credit card late fees, as well as investigating
companies over credit reporting and medical debt.
He even turned a spotlight on big tech companies that have increasingly
made inroads into financial services. The CFPB ordered Apple to pay $89
million in fines and penalties for problems related to the Apple Card.
Paypal’s Venmo is used by millions to split a bill, and the bureau found
that payment and funds transfer apps like PayPal and Venmo should fall
under the federal consumer protection laws, just like banks.
Banks and the financial services industry felt Chopra acted too
aggressively, particularly with a proposal to cut overdraft fees to $5
from the industry average of $27 to $35. The bureau estimated the move
would save consumers roughly $5 billion a year. The proposal was
overturned by Congress with Trump's backing earlier this year.
“We are thankful that the Trump Administration recognized the harm to
consumers, the market, and the overall economy posed by the CFPB’s
overreaches under its prior leadership,” said Lindsey Johnson, president
of the Consumer Bankers Association.
Under Trump 2.0, the bureau became a main target of the Department of
Government Efficiency, then run by Elon Musk, who posted on X that the
CFPB should “RIP” shortly after DOGE employees became embedded at the
agency. Through the bureau’s acting chief, Russell Vought, the White
House issued a directive that CFPB employees should “ not perform any
work tasks. ”
The administration then tried to lay off roughly 90% of the bureau’s
staff, or roughly 1,500 employees. Courts have blocked those layoffs,
but there is a feeling inside the bureau that the court rulings are only
a temporary reprieve.
‘Reverse-engineering’
Sensing blood in the water, companies that committed wrongdoing, or had
open investigations, have lobbied the bureau and the White House for
their punishments to be rescinded. Employees at the bureau say the only
time their workdays get remotely busy these days is when the White House
instructs them to begin rescinding one of these punishments. It often
involves “reverse-engineering” reasons why the bureau, which
investigated and found that these companies did harm to consumers, now
no longer believes that happened.
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Office of Management and Budget Director Russell Vought walks at the
White House, Monday, July 7, 2025, in Washington. (AP Photo/Alex
Brandon, File)
 In 2024, Navy Federal Credit Union
agreed to settle claims that it illegally charged overdraft fees to
its members. Among the customers at the $180 billion financial
institution are Navy service men and women, and veterans. Vought
canceled the settlement last month, and Navy Federal will no longer
have to pay back $80 million in fees. A spokesman for Navy Federal
declined to comment on whether the credit union planned to return
those funds to its members, as it originally said it would.
In 2023, the auto financing arm of Toyota was found to be illegally
bundling products onto car buyers’ auto loans, refusing to cancel
those products and doing harm to customers’ credit scores. Toyota
was ordered to refund $48 million to harmed customers. That
settlement was rescinded in mid-May. A spokesman for Toyota declined
to say whether customers would be reimbursed.
“Companies are lining up to get out of repaying harmed customers,”
said Eric Halperin, former enforcement director at the bureau, who
resigned earlier this year.
It’s not just settlements from the Biden era. At the end of Trump’s
first term in 2020, the CFPB sued the Chicago-based mortgage company
Townstone Financial after the company’s executives made statements
that were seen as discouraging Black homebuyers from applying for a
loan with the company. Townstone and its executives fought
vigorously with the bureau, saying that words spoken on a podcast or
on social media cannot be construed as discrimination or redlining.
Courts agreed with the bureau and eventually Townstone settled in
November, agreeing to pay a $105,000 penalty.
Under Vought, the bureau said it would move to vacate the settlement
and would return Townstone’s fine. Courts have blocked the dismissal
of that settlement, with one judge saying the CFPB wanted to commit
“an act of legal hara-kiri that would make a samurai blush.”
The Associated Press sent a list of questions to the White House
regarding President Trump's vision for the CFPB. The White House did
not respond.
While the lack of new initiatives and the scuttling of old ones
frustrate employees the most, they also note that even everyday
tasks like collecting consumer complaints about financial service
companies have largely fallen to the wayside.
The CFPB has run a consumer complaint database for nearly a decade,
basically an online portal where a consumer uploads a complaint and
the bureau then forwards that complaint to the subject company. A
report done by the office of Sen. Elizabeth Warren, the senior
Democrat on the Senate Banking Committee, found that the bureau is
uploading roughly 2,200 complaints a day compared to the roughly
10,500 complaints it was doing in the months before Trump took
office again. Warren came up with the idea for the bureau when she
was a law professor at Harvard University.
The bureau did take an enforcement action on Friday. The pawn shop
chain FirstCash Inc. agreed to pay $9 million in refunds and fines
to settle claims that it charged excessive interest rates on loans
to armed service members, in violation of the Military Lending Act.
FirstCash operates more than 1,000 stores and had net income of $259
million in 2024.
Budget Cut
The bureau is going to be even further diminished in the coming
months. The new budget law signed by Trump earlier this month cuts
the CFPB’s funding by roughly half, meaning the bureau will be
forced into mass layoffs. Senate Democrats are looking for ways to
restore that funding.
“The agency is still standing and its mission to protect consumers
remains as important as ever,” Warren said in a statement. "We will
fight back using every tool at our disposal.”
That said, one supervision employee grimly joked that a 50% budget
cut to the bureau will mean little, based on how the bureau is
currently operating.
“A 50% cut of nothing is still nothing,” they said.
In the meantime, employees go about their mundane routine: They
continue to check their email once or twice a day to see if any of
their previous work has been slated for being undone. They don’t
talk to anyone, not even the banks they are supposed to supervise.
They wait to be laid off. The only constants are the silence from
bureau political appointees or the “mini funerals” that happen every
Friday, when another batch of employees who have decided to leave
the bureau voluntarily have their last day.
“I don’t think I’ll ever work in public service again,” said one
current employee, who has been looking for a new job for the past
three months.
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