The recent developments at the Consumer Financial Protection Bureau (CFPB) have sparked controversy and concern among employees and lawmakers alike. According to testimony from employees, the Trump-appointed leadership at the CFPB is planning to fire nearly all of its 1,700 employees and “wind down” the agency.
In a series of statements released recently, federal employees revealed that discussions about mass layoffs were held in meetings with senior CFPB leaders and members of Elon Musk’s Department of Government Efficiency (DOGE). Employees, speaking anonymously out of fear of retaliation, disclosed plans to cut the bureau’s workforce in three phases. The first phase would involve the elimination of probationary and term employees, followed by a wave of approximately 1,200 layoffs, leaving only a skeleton crew of a few hundred workers. The final phase would see the termination of most remaining staff within 60-90 days.
These revelations come at a critical time for the CFPB, an agency established to protect consumers in the aftermath of the 2008 financial crisis. Since the arrival of DOGE operatives at the CFPB, the agency has closed its Washington headquarters, initiated layoffs, and halted most work activities. Additionally, the agency has reversed course on several cases involving financial firms accused of consumer harm, dismissing at least four cases involving billions of dollars.
The employee statements were submitted in a case brought by a CFPB union, resulting in a judge halting acting Director Russell Vought’s actions to dismantle the agency. Despite Vought’s claims that the agency would continue to exist in a “streamlined and efficient” form, employees revealed plans to reduce the CFPB to just five employees, either in a standalone office or folded into another regulatory body.
Critics have raised concerns about the legal implications of such drastic downsizing, as only Congress has the authority to abolish the CFPB, which was established through the Dodd-Frank Act in 2010. While Vought’s actions may allow him to claim that the agency still exists, employees question whether a mere handful of staff could fulfill the agency’s statutory obligations, including responding to consumer complaints and maintaining advocacy offices for vulnerable populations.
In response to the controversy, Jonathan McKernan, Trump’s nominee to lead the CFPB, pledged to enforce the agency’s mission faithfully if confirmed by the Senate. However, lawmakers, including Sen. Elizabeth Warren, expressed skepticism about the agency’s future under Vought’s leadership. With uncertainty looming over the fate of the CFPB, employees and advocates are closely monitoring developments to ensure the agency’s continued ability to protect consumers from financial harm.
