Consumers are left more vulnerable to scams, fraud, and abusive financial practices
WASHINGTON DC – One year after staff at the Consumer Financial Protection Bureau was first ordered to halt its work, the Bureau’s future remains in limbo as a lawsuit filed by employees to prevent mass layoffs is under appeal. Since that initial stop work order was issued in February 2025, the CFPB’s priorities have been dramatically narrowed, most enforcement actions have been dropped, funding slashed, and regulatory guidance abandoned.
“The CFPB may still be standing, but it’s essentially on life support,” said Chuck Bell, advocacy program director at Consumer Reports. “Dismantling the CFPB sends the message that it’s open season on consumers because the financial cop that was created by Congress to protect our wallets from unscrupulous financial firms has been taken off the beat. Without the CFPB standing up for consumers and taking on the big banks and predatory lenders, we’re all more vulnerable to abusive financial practices and costly fraud and scams.”
Over the past year, the CFPB’s ability to protect consumers has been severely undermined in a number of ways:
Stop Work Order: In February 2025, CFPB employees were told to stop all work, and cease all supervision and examination activity and “stakeholder engagement, and the Bureau’s headquarters was closed.
Dropping Enforcement Efforts: Over the past year, the CFPB has abandoned more than 22 enforcement actions against banks and other financial companies that engaged in a variety of unfair and abusive practices. In addition, the CFPB abolished or modified orders in 20 other settled cases that would have provided refunds and restitution to consumers harmed by unfair conduct by banks and financial companies.
Among the most significant cases dropped by the CFPB are its lawsuit against Capital One for cheating savings account holders out of $2 billion in interest for failing to disclose higher-rate accounts; its suit against Zelle and the major banks that operate it for failing to protect consumers from widespread fraud on the payment platform; and its $95 million settlement with Navy Federal Credit Union for deceptive overdraft fees, which was abandoned without explanation. Altogether, these dropped cases had the potential to return more than $3 billion in refunds and restitution to consumers.
Mass Layoffs: In February 2025, dozens of probationary workers were fired, including many in the enforcement division. Efforts to fire up to 90 percent of the staff are currently being challenged by the employees’ union in court.
Deprioritizing oversight of Big Tech and Nonbank Financial Firms: In April 2025, an internal CFPB memo detailed how the Bureau was dramatically scaling back its supervisory and enforcement activities and deprioritizing oversight of nonbank financial firms and big tech companies that provide financial services. In particular, the memo notes that the CFPB was deprioritizing working on issues involving medical debt, peer-to-peer platforms and lending, student loans, remittances, consumer data, and digital payments. The move created an uneven regulatory playing field that leaves consumers at risk of being treated unfairly since Big Tech companies like Apple and Google are providing many of the same financial services as banks. In August, the CFPB proposed dramatically shrinking the number of auto finance, credit bureaus, debt collectors, and international money transmitter companies subject to examination.
Rescinding Regulatory Guidance Documents: Over the past year, the CFPB has withdrawn 67 regulatory guidance documents, including interpretive rules, policy statements and advisory opinions adopted by the Bureau since 2011. For example, CFPB’s proposed modification of guidance relating to the Equal Credit Opportunity Act (ECOA) would remove disparate-impact liability, reduce credit programs for underserved borrowers, and undermine decades of progress in combating discrimination in lending. The CFPB also rescinded guidance governing medical debt and time barred debt, which was adopted to protect consumers from inaccurate credit reports and aggressive debt collection practices.
Abandoning Rules to Reduce Excessive Fees: The CFPB also backed away from longstanding efforts to lower excessive late fees for credit cards, which would have saved consumers $10 billion, by withdrawing a final rule and refusing to defend it in court. A similar rule to reduce overdraft fees at the nation’s largest banks which would have saved consumers another $5 billion was overturned by Congress last year after extensive lobbying by banks and trade groups.
Defunding Efforts: The Bureau refused to request quarterly funding for the CFPB in 2025 in an attempt to exhaust its funding by early 2026. Then the Bureau said its funding drawn from the Federal Reserve was illegal since the Fed had been operating at a loss. In December 2025, a federal court disagreed and ordered that the funding be sought. Last summer, Congress passed a budget reconciliation bill that effectively cut the CFPB’s funding nearly in half by reducing the amount of funds it could draw from the Federal Reserve.
Consumer complaint database neglected: Since its inception, CFPB has operated a consumer complaints portal, which helps customers resolve problems with banks and other financial companies. Complaints received by the CFPB are forwarded to the company at issue, and most consumers receive a response in 15-30 days.
Staff cuts at CFPB have reduced the agency’s capacity for intake and resolution of complaints, at a time when the overall number of complaints are surging. A recent analysis by the Consumer Federation of America found that over 830,000 complaints are currently unresolved. As CFPB’s watchdog function to engage in investigations and enforcement has receded, banks and financial companies may have less incentive to take complaints seriously.
Media Contact: Michael McCauley, michael.mccauley@consumer.org