The Consumer Financial Protection Bureau (“CFPB” or the “Bureau”) has recently made headlines in the past month under the Trump administration due to an extensive freeze on its core functions, headquarters closure, the resignation of enforcement and supervision chiefs, the dismissal of a string of enforcement actions, over $100 million in vendor contracts canceled, and the potential for sweeping layoffs, indicating the Bureau’s uncertain status. Below, we discuss the critical events that have transpired at the CFPB in the last few weeks.
Legislation Aims to Curtail Agency Powers
Republican lawmakers are leveraging legislative measures to limit the CFPB's authority, reflecting the Trump administration's wider policy agenda. Various bills introduced, notably by Representatives Andy Barr (R-KY) and Senator Ted Cruz (R-TX), seek to weaken the regulatory powers of the CFPB. While these legislative maneuvers face challenges due to Senate vote requirements, they underscore the administration's concerted efforts to redefine the Bureau's role.
Senate Reviews Permanent Director Nominee
Jonathan McKernan's nomination hearing as the new permanent director of the CFPB progressed as he faced the Senate Banking Committee last Thursday, February 27, 2025. Appointed by President Trump, McKernan promised to retain the agency's operational status while pursuing a different management trajectory compared to his predecessor, Rohit Chopra. McKernan’s vision for the CFPB entails a reduction in what he perceives as excessive regulation from the prior administration. He pledged to rein in the Bureau and bring these “past excesses” to an end.
A Reorientation of Enforcement Priorities
In line with the Trump administration's efforts to reorient the enforcement priorities of the Bureau, the CFPB has dropped a string of enforcement actions filed under the Biden administration. In the last week alone, the CFPB voluntarily dismissed five enforcement actions, and on Tuesday, March 4, 2025 dropped a major case filed in December against three of the nation's largest banks (JP Morgan, Bank of America, and Wells Fargo) over their handling of the payment service Zelle for allegedly failing to protect consumers from fraud costing hundreds of millions of dollars. These dismissals continue to raise questions about how the Bureau, under Trump-appointed leadership, seeks to reshape its approach to financial oversight and consumer protection.
Possible Internal Dismantling of the CFPB
On February 9, 2025, the National Treasury Employees Union (“NTEU”) brought an action in federal court, challenging the Trump administration’s “ongoing effort to [illegally] dismantle the CFPB.” In declarations filed for the case last Thursday, February 27, several CFPB employees alleged that they were asked to help diminish the Bureau’s size to the minimum legally mandated staff count. While this suit remains in litigation, there are questions about the CFPB’s stability, leading to a rise in the voluntary exodus of some employees from the Bureau, including the resignation of enforcement and supervision chiefs. This supposed intention to internally “wind down” the Bureau to a skeletal team of “five men” hints at the Trump administration and the new Department of Government Efficiency’s (“DOGE”) ongoing approach to reevaluate the scope and reach of federal entities, particularly those established during previous administrations.
These developments reflect the beginning of many significant changes expected during the Trump administration's tenure and has led many observers to wonder whether the Trump administration aims to “delete” the CFPB altogether, as Elon Musk, the head of DOGE, has suggested. But in court filings last week, the Trump administration said it doesn’t intend to shutter the Bureau, pointing to McKernan’s nomination as evidence to support that.
We will continue to monitor this pivotal time for the CFPB as it looks to reshape its future influence in the realm of consumer financial protection.
