Ken Sweet, Associated Press Bank Writer
NEW YORK (AP) – Lights are on at the Consumer Financial Protection Bureau across from the White House, and employees are still paid. However, in reality, the station has been largely inoperable for almost six months. CFPB employees say they essentially spend their work day sitting in hand, forbidden to do work under command from the White House.
The bureau is to assist in the supervision of the country’s banks and financial services companies in the event of fraud and take enforcement action. Instead, the situation is Kafkaesque. The main function appears to revert to the rules and law enforcement work carried out under previous administrations, including President Donald Trump’s first term.
American consumers are no longer able to seek assistance from the bureau when it comes to checking accounts, credit cards, payday loans, car loans or mortgages. Trump castrated the Watchdog, says the employee is the culmination of years of efforts by Republicans whom the agency often felt they were outboard with the efforts.
One current employee who spoke on condition of anonymity said outsiders were surprised at how little work there was, as the order would prohibit staff from speaking publicly about their work. Employees are even reluctant to talk to each other, fearing that conversations between two employees will be considered a violation of the order.
Another employee described the dramatic shift in the mission, from trying to protect consumers to doing nothing, to being “very disrupted.”
To understand what’s going on within the CFPB, The Associated Press spoke with 10 current and former employees, as well as bankers and policymakers who interacted with the Bureau almost every day, and say that emails and voicemails are now in the black hole. The agency’s press does not respond to emails.
Various approaches
Office Rank and File employees and former CFPB officials say they expected the department to continue working under “Trump 2.0,” although in a more restrained way. In Trump’s first term, his then-director, Kathy Cranninger, took a lighter approach to oversight and enforcement, but even so, some of the biggest financial settlements in the bureau’s history took place in the meantime.
President Joe Biden’s choice to run the bureau, Rohit Chopra has taken a vast view of the authorities, targeting profitable bank practices such as overdrafts and credit card deferral fees, and has looked into companies on credit reporting and medical debt.
He has put the spotlight on the large tech companies increasingly expanding into financial services. The CFPB has ordered Apple to pay a $89 million fine and fine for issues related to Apple cards. PayPal’s Venmo has been used by millions to split the bill, and the bureau has discovered that payment and fund transfer apps such as PayPal and Venmo should qualify under the federal consumer protection laws, just like banks.
The banking and financial services industry felt that Chopra was acting too aggressively. In particular, there was a proposal to reduce overdraft fees from an industry average of $27 to $35 to $5. The department estimated the move would save consumers about $5 billion a year. The proposal was overturned by Congress earlier this year with Trump’s support.
“We are grateful that the Trump administration has recognized the harm to consumers, markets and the overall economy caused by the CFPB’s overreach under its previous leadership,” said Lindsey Johnson, president of the Consumer Banks Association.
Under Trump 2.0, the bureau became a major target for government efficiency, then posted to X that it should be run by Elon Musk and that the CFPB should “RIP” shortly after Doge employees were incorporated into the agency. Through Russell Vert, the agency’s acting chief, the White House issued an order that CFPB employees should not perform work tasks.
The administration then attempted to fire around 90% of the department’s staff, or about 1,500 employees. The court blocked these layoffs, but inside the department it feels that the court’s decision is merely a temporary reprieve.
“Reverse Engineering”
Companies that sensed underwater, committed misconduct or conducted open investigations have pushed the prisons and the White House to revoke the punishment. Office employees say the only time the recent work days are getting far and busier is when the White House instructs them to withdraw one of these punishments. Often, the stations that investigate the harm these companies are causing consumers and discover that it is no longer happening is accompanied by a “reverse engineering” reason.
In 2024, the Navy Federal Credit Union agreed to resolve allegations that it illegally charged overdraft fees to its members. Among the $180 billion financial institution customers are men and women in Navy Services and veterans. Vought canceled the settlement last month, and the Navy Federation will no longer have to pay back $80 million in fees. A Navy Federal spokesman declined to comment on whether credit unions plan to return those funds to their members, as originally they did.
In 2023, Toyota’s automotive financing division was found to illegally bundle products into car loans for car buyers. Refusing to cancel these products, causing harm to the customer’s credit score. Toyota was ordered to refund $48 million to the affected customers. The settlement was cancelled in mid-May. A Toyota spokesman declined to say whether the customer would be refunded.
“We’re accused of the department,” said Eric Halperin, former executive director of the department, who resigned earlier this year.
It’s not just villages that have been around since the Biden era. At the end of Trump’s first term in 2020, the CFPB sued Chicago-based mortgage company Townstone Financial after a company executive issued a statement deemed to discourage black home buyers from applying for loans with the company. Townstone and its executives fought hard against the station, saying that words spoken on podcasts and social media could not be interpreted as discrimination or redlining. The court agreed to the bureau and eventually Townstone settled in November and agreed to pay a $105,000 fine.
Under Vought, the department said it would move to open a settlement and return the Townstone fine. The court blocked the settlement from being rejected, and one judge said the CFPB wanted to commit “legal harassment acts that would make samurai blush.”
The Associated Press has sent a list of questions about President Trump’s vision for the CFPB to the White House. The White House did not respond.
The lack of new initiatives and the abandonment of the oldest are the most frustrating of employees, but they also note that even routine tasks such as gathering consumer complaints about financial services companies have fallen wildly on the roadside.
CFPB has been running a consumer complaint database for nearly a decade. Essentially, it is an online portal where consumers upload complaints and the bureau forwards them to the target company. A report from the office of Sen. Elizabeth Warren, a senior Democrat on the Senate Banking Committee, found that the department uploads about 2,200 complaints a day, compared to about 10,500 complaints a few months before Trump re-inaugurated office. Warren came up with the idea for the bureau while he was a law professor at Harvard University.
The department took enforcement action on Friday. Pawn Shop Chain FirstCash Inc. has agreed to pay a $9 million refund and fine to resolve its claim that it had charged excessive interest rates on loans to armed service members in violation of the Military Loan Act. FirstCash operates more than 1,000 stores and in 2024 its net profit was $259 million.
Budget reduction
The bureau will decline even further in the coming months. The new budget law, signed by Trump earlier this month, cuts CFPB funds by roughly half. This means that the station is forced into a massive layoff. Senate Democrats are looking for ways to recover that fund.
“The agency is still standing, and its mission to protect consumers remains as important as ever,” Warren said in a statement. “We’re free to use all our tools to fight back.”
That said, one supervisor employee made a harsh joke that a 50% budget cut to the department would make little sense, based on the department’s current operating methods.
“There’s nothing 50% cut yet,” they said.
In the meantime, employees will take up mundane routines. They continue to check emails once or twice a day to see if any of their previous works are scheduled to be reverted. They don’t talk to anyone, and even the banks they are supposed to oversee. They wait for them to be fired. The only number is a silence from the Bureau’s political appointee, or a “mini funeral” held every Friday.
“I don’t think I’ll be working in public services again,” said the current employee who has been looking for a new job for the past three months.
Original issue: July 15th, 2025 8:14am EDT
