The CFPB: A Year of Turmoil and Change

The Consumer Financial Protection Bureau (CFPB) has had a rocky year. In early 2025, things took a dramatic turn. Employees were told to stop working. Offices were closed, but staff weren't on leave. They were just at home, staring at their screens, unable to do their jobs. This was part of a bigger plan by the Trump administration. They wanted to shrink the agency. They cut funding and planned to lay off most of the staff. Congress created the CFPB in 2010 after the financial crisis. Its job was to protect consumers from fraud and predatory practices. Since then, it has returned $19. 7 billion to consumers. But the agency has critics. They say it overreaches and hurts small businesses. One of those critics, Russell Vought, became the acting director in February 2025. He was part of a project that wanted to abolish the CFPB. Soon after taking charge, he told workers to stop working. Many employees resigned. Others were laid off. The union sued to stop the layoffs. A judge ordered a temporary halt to the layoffs and other actions. But the battle wasn't over.Congress slashed the agency's budget. The administration argued that the CFPB couldn't get funding from the Federal Reserve. A coalition of state attorneys general sued in response. A judge rejected the administration's argument and ordered Vought to request the funds. Even with some duties resuming, the agency's work has been rolled back. Complaints about businesses sent to the CFPB were up 89% in December 2024 compared to the previous December. But with the agency in a diminished state, it's unclear if these complaints are being addressed. Some critics of the agency are worried. They say Congress, not the administration, should dismantle the agency. State and local officials have stepped in to fill the gap. For example, New York Attorney General Letitia James led an investigation that resulted in Capital One paying $425 million in restitution. The CFPB's work is intertwined with affordability. Yet, while the president says he's making affordability a priority, the agency has been sidelined. Rules that the CFPB put in place to limit fees and protect consumers have been repealed or not enforced. It's confusing. The administration says it's pursuing ways to alleviate the affordability crisis. But the CFPB, which could play a big role in this, is not fully functional. It's a year of turmoil and change for the agency.