A stressed-out woman looking at a stack of credit card bills and overdue notices with high fees. There is a calculator in front of her and she holds a credit card.
Credit: Moment Makers Group on iStock

It is impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house. But it is possible to refinance an existing home with a mortgage that has the same one-in-five chance of putting the family out on the street.

Elizabeth Warren, “Unsafe at Any Rate,” 2007.

When Elizabeth Warren, then a Harvard law professor, first proposed the creation of a Financial Product Safety Commission, she did so in response to a housing crisis that ultimately became known as the Great Recession.

Four years later, in July 2011, the Consumer Financial Protection Bureau (CFPB)—the agency Warren envisioned—began operations, as set forth in the Dodd-Frank Wall Street Reform and Consumer Protection Act, which had passed the previous year.

The CFPB has long been in President Donald Trump’s crosshairs. In the Project 2025 report, Robert Bowes, a former Trump housing official, called for the agency’s abolition on grounds that its scope of authority is too broad, including having the ability, as Bowes put it, to levy “knee-buckling penalties.” Now Russell Vought, Trump’s head of the Office of Management and Budget, is seeking to shutter the agency. On February 8, just two days after being confirmed to lead OMB, Vought sent a dramatic email to CFPB staff instructing workers to:

  • Not approve or issue any proposed or final rules or formal or informal guidance.
  • Suspend the effective dates of all final rules that have been issued or published but that have not yet become effective.
  • Not commence, take additional investigative activities related to, or settle enforcement actions.
  • Not open any new investigation in any manner, and cease any pending investigations.
  • Not issue public communications of any type, including publication of research papers and compliance bulletins.

The drama at CFPB, of course, is just part of a broader Trump administration effort to sidestep Congress and reduce the federal workforce by administrative fiat.

Forming the CFPB effectively created a federal consumer financial advocate for the first time.

A few days later, on February 14, Judge Amy Berman Jackson of the US District Court in Washington, DC, issued a ruling that blocked the threatened mass firings of CFPB staff. A hearing has been scheduled for March 3. However, despite the ruling, already over 100 CFPB workers who had four years of seniority or less have received firing notices.

But why is the CFPB being attacked? What does it do? And why does the outcome of this dispute matter for economic justice more broadly?

Nuts and Bolts: What Does the CFPB Do?

As a 2024 US Supreme Court decision upholding the funding mechanism of the CFPB noted, the statute creating the CFPB gave it the authority to “administer 18 existing consumer protection statutes, among them the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, and the Home Mortgage Disclosure Act of 1975.” These are just three in a long list of consumer protection laws that the CFPB enforces.

Effectively, prior to the CFPB’s formation, enforcement of these laws was the domain of banking regulators whose first priority was financial regulation, not consumer protection. As a result, consumer protection often got second fiddle. Forming the CFPB effectively created a federal consumer financial advocate for the first time. Its core functions include writing and enforcing financial regulations, monitoring financial markets for risks to consumers, education about financial products and services, and handling complaints.

Notably, Bowes, in his Project 2025 chapter, called for “returning the consumer protection function of the CFPB to banking regulators,” which would empower banks and disempower federal officials who might seek to promote consumer wellbeing.

The CFPB has “secured almost $20 billion in relief for an estimated 195 million consumers…and handled over 5.6 million complaints from consumers.”

Broadly speaking, CFPB agency rulemaking has saved US consumers billions of dollars. Chuck Bell of Consumer Reports explains that the agency has “engaged in a lot of enforcement activity that secured almost $20 billion in relief for an estimated 195 million consumers…and handled over 5.6 million complaints from consumers across the country, often helping people to sort out things like errors on their credit reports and excessive loan payments that they shouldn’t have to make.”

As Peter Sabonis succinctly put it in NPQ not long ago, the CFPB sets rules to protect “households from predatory lending, usury fees, and the ravages of speculative capitalism.” For example, John Cassidy writes in The New Yorker that in 2024 the agency “ordered a reduction in credit-card late fees, which cut the typical payment by more than half, and capped bank overdraft fees at five dollars.” ABC also notes that, “During the Biden administration, the CFPB passed rules capping bank overdraft fees and removing medical debt from credit reports.” Both of these rules, however, are at risk of being clawed back by the Trump administration.

Money in Your Pocket?

On January 25, in a speech to Nevada supporters, Trump said that a key priority of his administration is to “put more money in your pocket.”

But the actions to curtail the CFPB are likely to do the opposite—facilitating the ability of financial actors to take money from people’s pockets.

The actions to curtail the CFPB…[facilitate] the ability of financial actors to take money from people’s pockets.

Among the enforcement actions put on pause by the Trump administration are a lawsuit by the CFPB against Capital One alleging that the company misled customers about its savings accounts to the tune of $2 billion in lost interest payments, a suit involving three large banks (Bank of America, JPMorgan Chase, and Wells Fargo) alleging hundreds of millions of dollars in fraud on the Zelle payment system, and a suit against Walmart and Branch Messenger for collecting over $10 million in junk fees from workers, and alleging Walmart forced drivers to use Branch’s accounts to get paid.

What happens next remains to be seen, as the courts have intervened, at least for now, to stymie shutdown efforts. That said, the stakes are high: As a recent US News article summed it up, “Shuttering the CFPB could mean higher fees and fewer protections.”