The Trump administration is implementing major staff cuts at the Consumer Financial Protection Bureau (CFPB), letting nearly 90% of its staff go as part of a larger initiative to scale back the agency's role in monitoring consumer financial protections.
What Happened: More than 1,500 CFPB employees are being sent reduction-in-force notices, bringing the agency's workforce down to just over 200, according to a Fox Business report.
The layoffs cover core operations, including supervision and enforcement roles. Internal communications obtained by The Wall Street Journal show a noticeable reduction in supervisory exams and a shift back to oversight of traditional banks and credit unions.
See Also: Judge Strikes Down Biden-Era Rule Capping Credit Card Late Fees At $8
Why It Matters: The changes indicate a significant shift in the orientation of federal consumer protection strategy. "We're reallocating resources to address tangible consumer harm," wrote CFPB Chief Legal Officer Mark Paoletta in a memo to staff.
The agency will now focus on mortgage-related issues, data mismanagement, and financial fraud, while stepping back from domains like medical debt, student loans, and digital payments. The CFPB also vowed to avoid "novel legal theories" and adhere to well-defined legal boundaries.
The CFPB's new direction highlights the Trump administration's wider push to limit regulatory reach and lower government intervention in financial markets.
With Jonathan McKernan's nomination to lead the agency still awaiting Senate confirmation, the bureau's future will likely continue to be molded by ongoing legal and political battles over its scope and authority.
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