The Trump Administration plans to fire most of the Consumer Financial Protection Bureau (CFPB) staff and dismantling the agency. The employees have testified about the mass layoffs and the winding down of the CFPB. This testimony reveals a concerning situation for the agency established to safeguard consumers post the 2008 financial crisis.
Employees’ Testimony
According to the employees, discussions involving mass layoffs took place in meetings with CFPB leaders and members from Elon Musk’s “Department of Government Efficiency.” The plan aimed to execute layoffs in three phases, starting with probationary and term employees, followed by approximately 1,200 more layoffs. The ultimate goal was to reduce the workforce to a few hundred employees within 60-90 days.
In the wake of DOGE’s arrival at the CFPB, the agency has already begun layoffs, closed its headquarters, and ceased ongoing work. Furthermore, the department has withdrawn several cases against financial firms accused of consumer exploitation, which raises concerns about consumer protection.
The employees’ statements were presented in a case initiated by a CFPB union, leading to a halt in the agency’s actions following the suspension of acting Director Russell Vought’s attempts to shut down the bureau. Vought’s assertion about maintaining a “streamlined and efficient bureau” contradicts the plan to retain just five statutorily mandated positions, as revealed by the employees’ testimonies.
DOGE’s Role
Elon Musk’s involvement through his Department of Government Efficiency has intensified the scrutiny on the CFPB. The employees testified that DOGE’s goal was to slash the agency’s workforce down to five employees who would be relocated to another regulatory body or left standalone.
DOGE operatives have been actively involved in decisions regarding layoffs and operational cuts at the CFPB. Despite gaining access to the agency’s systems and data, the DOGE employees were yet to complete cybersecurity and privacy training required by the agency, raising concerns about data security and privacy breaches.
While Musk and Vought have been vocal about their desire to dismantle the CFPB, only Congress has the authority to shut down the agency. The employees are skeptical about the ability of just five employees to fulfill the numerous statutory requirements of the agency, including handling consumer complaints and maintaining advocacy offices for specific groups.
Jonathan McKernan, Trump’s nominee to lead the CFPB, assured lawmakers, including Sen. Elizabeth Warren, that he would enforce laws related to the agency’s mission if confirmed. However, the uncertainty surrounding the agency’s future, particularly with the cancellation of its headquarters lease, has left many questioning the agency’s fate.
Sen. Jack Reed expressed concern over McKernan’s position, likening it to departing on the Titanic, indicating the challenges ahead for the nominee. The future of the CFPB remains uncertain amidst the ongoing restructuring and layoffs under the Trump Administration’s plan.
