CFPB Narrows Supervision and Enforcement, Leaving Broader Focus to States

The CFPB confirmed in a recent memo to staff that it is shifting its tone on supervision and enforcement—even as reports circulate about significant staffing cuts and potential structural changes at the agency. While the document announces a return to core statutory enforcement and a retreat from expansive interpretations—it is not a full retreat from all activity—at least on paper.

For companies in the consumer financial services space, the message is both clear and incomplete: the Bureau may be changing, but it’s not fully going away. The memo presents a roadmap of what the CFPB will do, and what it won’t do. That said, we’re still in a fluid moment, and there’s been no change to federal consumer financial law. The Bureau could still make further organizational changes and face political challenges.

How active the Bureau will become remains an open question; and some states will end up taking a more active role in regulation and enforcement. Financial services providers will need to plan for the current reality, while staying ready for future policy shifts and potential changes to the underlying legal landscape.

A Scaled-Back CFPB, Not a Silent One?

The memo—first brought to light by a Wall Street Journal reporter—reflects a shift toward narrower, statute-driven regulation and supervision. It emphasizes a reduced federal footprint in areas where the CFPB believes the law provides limited authority or where states already maintain oversight regimes. But the memo also reaffirms that the Bureau intends to remain operational—prioritizing certain consumer financial services laws when it engages in targeted supervision and enforcement.

At the same time, recent news cycles have reported on withdrawal from enforcement matters, regulatory rollbacks, staffing reductions, removal of the CFPB’s signage from its headquarters, and broader political proposals to restructure or eliminate the agency entirely. Against that backdrop, this memo signals a plan for some future CFPB activities, albeit in a downsized form, and a significant shift from prior administrations.

Eleven Priorities: A Reset

The memo outlines eleven priorities that would guide the Bureau’s supervision and enforcement efforts:

1. Reduce supervisory footprint by 50%. The CFPB would reduce its supervisory footprint by half, limiting exams to the highest-risk entities and markets. According to the memo, “the focus should be on conciliation, correction, and remediation of harms subject to consumers’ complaints. Supervision should focus on collaborative efforts with the supervised entities to resolve problems so that there are measurable benefits to consumers.” 
2. Focus on depository institutions, as opposed to nondepository institutions. 
3. Focus on actual fraud. The CFPB would focus on identifiable victims with material and measurable consumer damages. The memo also sets out areas of priority: mortgages; FCRA/Regulation V data furnishing violations; FDCPA/Regulation F relating to consumer contracts/debts; various fraudulent overcharges, fees, etc.; and inadequate controls to protect consumer information, resulting in actual loss to consumers.
4. Focus on redressing tangible harm, not penalties.
5. Redress to service members and their families and to veterans.
6. Respect federalism. The memo says the CFPB would deprioritize participation in multi-state exams and supervision where states have and exercise ample regulatory and supervisory authority; and will minimize duplicative enforcement where state or law enforcement authorities are currently active.
7. Respect other federal agencies. The Bureau will eliminate duplicative supervision or supervision outside of its authority (citing an example of no supervision of M&A and inserting itself into bankruptcy supervision). The Bureau will coordinate exams with other federal regulators. The Bureau will minimize duplicative enforcement. 
8. No novel legal theories for supervision.
9. Fair lending enforcement. The Bureau will not engage in or facilitate unconstitutional racial classification or discrimination in its enforcement fair lending laws.
10. Deprioritize certain markets/products. Loans or other initiatives for “justice involved” individuals; medical debt; peer-to-peer platforms and lending; student loans; remittances; consumer data; and digital payments.
11. Focus on disclosure statutes, and no price controls. “The Bureau’s primary consumer enforcement tools are its disclosure statutes. The Bureau shall not engage in attempts to create price controls.”

At first glance, these priorities may seem like a deregulatory guidebook—and in part, they are. Medical debt and what the former CFPB leadership viewed as emerging risk areas are no longer front and center—suggesting a major pivot from the prior administration. But the priorities also suggest that the Bureau still intends to supervise banks (within its jurisdiction) and oversee some enforcement of core laws like TILA, FCRA, and the FDCPA. 

The CFPB’s deference to states is likely to create greater emphasis by some states on UDAAP enforcement generally, as well as licensing, registration, and enforcement, especially in areas like debt collection, small business finance, and money transmission. State attorneys general and state regulators can and likely will step in to enforce unfair, deceptive, and abusive acts and practices (UDAAP) standards under the Consumer Financial Protection Act and their own laws (to the extent available), and continue to use federal statutes like TILA, FCRA, FDCPA, EFTA, and others (and their own states’ consumer financial law), especially in areas where the CFPB is pulling back.

Key Takeaways

The memo outlines a plan for a CFPB that would still be operating, but with a much narrower focus on clear statutory enforcement. That said, with ongoing staff cutbacks, it’s unclear how much of the Bureau’s new priorities will translate into actual supervisory or enforcement activity.

Debt collection, TILA, FCRA, and EFTA remain active areas for potential federal scrutiny.

Companies should not assume deregulation equals de-risking—particularly with states able to step into any perceived regulatory gaps.

This is a strategic moment to review compliance programs, especially state by state, and ensure core practices align with both current federal and emerging state expectations, while also being mindful of the potential for a future regulatory “snapback.”