Americans will pay a steep price if the CFPB is dismantled and prevented from carrying out its critical consumer protection mission
WASHINGTON DC – Consumer Reports praised the U.S. District Court in the District of Columbia today for halting a mass layoff that was underway at the Consumer Financial Protection Bureau. District Court Judge Amy Berman Jackson ruled that the CFPB needed to demonstrate that the layoffs complied with her previous order requiring “particularized assessments” to prove that the laid off employees were no longer necessary to carry out the Bureau’s statutory duties. Another hearing on the lawsuit challenging the layoffs is scheduled for April 28 to explore these issues.
As many as 1,500 of the CFPB’s 1,700 member workforce were targeted for layoffs, according to a legal filing by the union representing Bureau staff. The layoff notices came on the heels of an internal CFPB memo outlining plans for dramatically scaling back the Bureau’s supervisory and enforcement activities and deprioritizing oversight of nonbank financial firms and big tech companies that offer financial services.
“The administration’s efforts to gut the CFPB through mass layoffs represent a huge betrayal of working families who depend on this critical watchdog to stand up to the banks and big tech firms and protect them from fraud and abusive financial practices,” said Chuck Bell, advocacy program director at Consumer Reports. “At a time when so many Americans are struggling with inflation and the high cost of living, it is deeply troubling to see these ongoing efforts to dismantle the agency dedicated to protecting our wallets.”
While other federal agencies, such as the Federal Reserve, FDIC and Office of the Comptroller of the Currency have some oversight and supervisory authority over the financial industry, they have historically not done a good job responding to consumer complaints and enacting new rules to ensure consumers are protected from unfair and deceptive practices.
“Before the CFPB was established, we learned a painful lesson about how lax federal oversight of the financial industry puts both consumers and the economy at risk,” said Bell. “Congress created the CFPB to be solely focused on consumer protection after federal regulators failed to rein in risky mortgage lending, which triggered the foreclosure crisis and tanked the economy. We can’t afford to make that mistake again. Dismantling the CFPB would leave consumers on their own and more vulnerable to getting ripped off by the latest financial industry tricks and scams.”
Since its founding, the CFPB has helped tens of millions of consumers resolve their complaints with financial firms and secured more than $21 billion in refunds and relief for an estimated 205 million consumers who were treated unfairly.
Media contact: Michael McCauley, michael.mccauley@consumer.org