Consumer Reports warns that gutting the CFPB will harm working families, leaving them vulnerable to fraud and abusive financial practices
WASHINGTON, D.C. – The White House’s latest efforts to undermine the Consumer Financial Protection Bureau puts consumers at risk of falling victim to fraud and scams and other abusive financial industry practices, Consumer Reports warned today. Over the weekend, CFPB Acting Director Russell Vought ordered the Bureau’s staff to cease “all supervision and examination activity” and “all stakeholder engagement,” and this morning instructed staff that the agency’s headquarters are closed this week and they should stop all work.
Vought also alerted the Federal Reserve that the CFPB will not be taking its next installment of funding. When Congress created the CFPB, it funded the agency through the Federal Reserve rather than through the annual appropriations process. Last year, the U.S. Supreme Court upheld the constitutionality of the CFPB’s funding, rejecting a challenge mounted by payday lenders.
“Big banks and other industry opponents of the CFPB have long sought to muzzle the consumer watchdog because it’s been so effective at rooting out discrimination and abusive practices that cheat families out of their hard-earned money,” said Delicia Hand, senior director, digital marketplace, at Consumer Reports. “The administration’s latest efforts to halt activity at the CFPB makes clear that they are intent on effectively shutting it down for the next four years.”
Hand continued, “Consumers face an increasingly complex financial marketplace today dominated by AI, big tech, and new digital products, making the CFPB’s work more critical now than ever. If the CFPB is effectively defunded and prevented from standing up for consumers, the consequences could be severe. Consumers will end up paying the price if the CFPB is sidelined and will be more likely to fall victim to predatory practices, hidden fees, and data privacy violations. Without an active cop on the beat looking out for consumers in the financial marketplace, the administration is essentially saying consumers are on their own.”
Critical CFPB efforts to protect consumers are endangered by these latest developments to gut the CFPB, including:
- Limits on credit card late fees and overdraft charges
- A ban on medical debt listed on credit reports
- Rules to prevent data brokers from selling consumers’ sensitive information
- Regulations on payday cash apps and buy now, pay later loans
- Penalties on companies for taking advantage of consumers
See CR’s full report to learn more about how consumers could be hurt by these attacks on the CFPB. To connect with one of CR’s experts on these issues, contact Michael McCauley at michael.mccauley@consumer.org