Now, workers at the CFPB remain in a holding pattern, The Wall Street Journal (WSJ) reported Sunday (Dec. 7).
The widespread layoffs planned by President Donald Trump’s administration have been paused by courts following a suit from a workers’ union. As that case is pending, the watchdog agency continues to pay hundreds of millions to workers who have very little to do.
The White House is said to be aiming to reduce staffing levels at the CFPB by 90%. The WSJ report said head count at the agency has fallen from around 1,700 to roughly 1,300, with some workers leaving voluntarily for more steady employment. Others told the newspaper they were waiting for the legal fight to be resolved.
Many of the CFPB employees who are still working are involved in scaling back the bureau’s regulations and policy positions, staffers told WSJ.
After initially ending a contract required to process consumer complaints about banks and other financial institutions — one of the CFPB’s congressionally mandated jobs — acting leadership has said in court filings that complaints processing has resumed.
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As WSJ noted, that function is viewed as one of the agency’s most crucial, an early alert system for systemic issues that also offers consumers a way to settle problems with lenders.
And last month, the bureau said it would resume examinations of banks, mortgage companies and other lenders. As WSJ pointed out, these reviews serve as routine checkups of financial institutions, and let regulators to point out or escalate potential issues. But now, staff will be required to read a “humility pledge” prior to each exam.
For its report, WSJ interviewed employees such as John Thompson, an attorney who left the CFPB in September and who said he hopes to pursue the enforcement work he loves in another venue.
“There are plenty of [state] attorneys general out there who want to go to war against bad actors in this industry, and my hope is that they’ll hire me to do that,” he said.
As covered here in June, the winding down of the CFPB’s enforcement efforts has been accompanied by renewed activity on the state level.
For providers however, “the state-by-state level actions mean there’s an increasingly fragmented regulatory terrain to navigate,” PYMNTS wrote.
