Trump Administration Targets Consumer Financial Protection Bureau

The Trump administration aims to dismantle the Consumer Financial Protection Bureau (CFPB) by dismissing 95% of staff and terminating its Washington, D.C. headquarters lease, as alleged in a federal lawsuit.

Mass Layoffs Deplete Agency Workforce

If successful, the mass firings would decimate the agency responsible for overseeing financial institutions and protecting consumers from predatory practices. The lawsuit claims the dismissals would render the CFPB unable to fulfill its statutory obligations.

Agency Operations Crippled

Following acting Director Russell Vought's work stoppage order, the CFPB has ceased bank and lender supervision, and its consumer complaint portal has been disrupted. The agency typically receives hundreds of thousands of monthly complaints.

Funding Reserves Return to Federal Reserve

Vought reportedly plans to transfer the CFPB's operating reserves to the Federal Reserve, signaling no need for additional funding due to the planned spending down of reserves.

Lawsuit Challenges Trump's Authority

The lawsuit argues that Trump's actions to weaken the CFPB usurp congressional authority and violate the Constitution's requirement for faithful execution of laws. The plaintiffs seek to reverse the work stoppages and prevent further firings.

Clash Over Agency's Role

The conflict highlights the Trump administration's efforts to reshape the federal bureaucracy. The CFPB was established by Congress to prevent predatory lending and address the 2007-2008 financial crisis.

Other Agencies Face Layoff Threats

The CFPB is not alone in facing mass layoff plans. The Department of Housing and Urban Development has been instructed to lay off 50% of its staff, but some firings have been temporarily halted by court orders.

Legal Battle Continues

A hearing in the CFPB case is scheduled for Friday before US Senior Judge Amy Berman Jackson. The outcome will determine the fate of the consumer protection agency and the extent of the Trump administration's authority to reshape federal agencies.