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| The Consumer Financial Protection Bureau has been a target of GOP and Wall Street critics since it began in 2011. |
The Trump administration’s push to dismantle the Consumer Financial Protection Bureau (CFPB) threatens to leave nearly $18 trillion in American consumer debt with less oversight and regulation.
“I think at some point, the machinery is going to start to jam up,” said the employee, who spoke anonymously out of fear of retaliation. “What is industry going to do on its own?”
The disruption follows a chaotic weekend at the agency. Acting Director Russell Vought instructed employees late Saturday to halt most work activities and then told them on Sunday not to report to the office for the remainder of the week. In a post on X, he also announced that the CFPB would not be drawing its next round of funding, stating it was not "reasonably necessary" for the agency's duties.
Meanwhile, staffers from Elon Musk’s Department of Government Efficiency project have sought access to CFPB personnel information. The move aligns with broader efforts by Musk, the world’s richest person, to dismantle or overhaul federal agencies, including the Department of Education and the nation’s primary foreign aid organization. Both actions targeting the CFPB have already triggered lawsuits from a federal union.
Since its creation in 2011, the CFPB has faced criticism from Wall Street and Republican lawmakers, including Vought. He co-authored Project 2025, a conservative policy blueprint for a potential second Trump term, which explicitly calls for eliminating the agency. Established under the Federal Reserve after the 2008 financial crisis, the CFPB was spearheaded by Sen. Elizabeth Warren, D-Mass., and survived a business-backed Supreme Court challenge to its funding just last year.
During Trump’s first term, Mick Mulvaney—who once called the CFPB a “joke”—was appointed director. Under his leadership, the agency dropped discrimination cases, ended a lawsuit against payday lenders, and disbanded its 25-member consumer advisory board.
Now, Trump officials are again targeting the CFPB following an aggressive four-year period under the Biden administration, during which the agency recovered nearly $20 billion in consumer relief.
The CFPB has broad authority to regulate financial institutions with over $10 billion in assets and to oversee nonbank lenders, including mortgage, auto loan, payday loan, and private student loan providers. It enforces consumer protection rules, investigates complaints, and promotes fair lending practices.
One of its most significant recent victories involved curbing overdraft and insufficient funds fees. CFPB scrutiny prompted many banks to drop these charges voluntarily, leading to a $6 billion decline in overdraft fee revenue from 2019 to 2023. The agency solidified this effort with a December rule capping overdraft fees at $5 for large banks, though its future is now uncertain.
Consumer advocates had speculated that the CFPB’s overdraft fee crackdown was popular enough for Trump officials to preserve. However, last week, the Republican-led House Financial Services Committee introduced a resolution to overturn the rule.
Another key CFPB initiative appears to be on the verge of collapse. In March, the agency introduced a rule lowering the standard credit card late fee from $32 to $8. The move sparked legal challenges from credit card issuers, and a Texas federal judge recently denied the CFPB’s request to lift an injunction blocking the rule. Under Vought’s leadership, further appeals seem unlikely.
There is a possibility of legislative relief for consumers, though the path is more difficult than the CFPB’s traditional rulemaking process. Earlier this month, Sens. Bernie Sanders, I-Vt., and Josh Hawley, R-Mo., introduced a bill to cap credit card interest rates at 10%, echoing a Trump campaign promise. However, the proposal faces strong opposition from both Congress and the financial industry. Lindsey Johnson, president and CEO of the Consumer Bankers Association, dismissed the measure as “Socialist-type pricing policies” that would “drive up costs for consumers.”
Beyond overdraft fees and credit card penalties, the CFPB has also worked to improve consumer credit health. It exposed violations by student loan servicers and uncovered errors in medical debt reporting.
Following a 2023 CFPB report on medical debt, the three major credit bureaus removed medical collections under $500 from credit reports, benefiting an estimated 22.8 million consumers. Last month, the agency finalized a rule to eliminate approximately $49 billion in medical debt from credit reports, affecting 15 million people. However, like the credit card fee cap, this rule is vulnerable to repeal by Congress.
Under the Biden administration, the CFPB also sought to regulate Big Tech and artificial intelligence as financial technology became more embedded in consumers’ lives. It implemented protections for “buy now, pay later” installment loans and heightened scrutiny of tech companies expanding into digital payments.
Musk, who has publicly called to “Delete CFPB” since Trump’s victory, is himself a player in the financial technology space. In January, his social media platform X partnered with Visa, the largest U.S. credit card network, to enable bank transfers and peer-to-peer payments.
With the CFPB’s future uncertain, consumer advocates worry that financial industry oversight could weaken, leaving Americans more vulnerable to unfair lending practices and hidden fees.
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