Report: Fed’s Inspector General to Review Legality of CFPB Cuts

The Federal Reserve’s inspector general is reportedly reviewing the Trump administration’s efforts to dismantle the Consumer Financial Protection Bureau (CFPB).

The Office of the Inspector General, which is an independent watchdog overseeing the Federal Reserve and the CFPB, is reviewing the administration’s attempts to lay off most of the CFPB’s staff and cancel the agency’s contracts, CNBC reported Thursday (June 12).

The report cited a June 6 letter from the office to Sen. Elizabeth Warren and Sen. Andy Kim, who had asked for an investigation into whether those actions were legal and how they would hinder the CFPB’s mission, according to the report.

Reached by PYMNTS, the Office of the Inspector General (OIG) declined to comment on the report.

Kim told CNBC, per the report: “As Trump dismantles vital public services, an independent OIG investigation is essential to understand the damage done by this administration at the CFPB and ensure it can still fulfill its mandate to work on the people’s behalf and hold companies who try to cheat and scam them accountable.”

Warren and Kim also asked the Government Accountability Office (GAO) to review the administration’s moves at the CFPB, and the GAO said in April that it would do so, according to the report.

In a series of letters delivered in April, Warren and Kim said they sought an investigation to ensure the CFPB was still able to fulfill its statutorily required functions after the administration’s efforts to dismantle it.

“Specifically, we ask the CFPB OIG to determine whether such actions were taken in accordance with all relevant federal laws and regulations and the extent to which they have impacted the agency’s ability to fulfill its mission and its statutorily required functions,” they wrote in one of the letters.

When the GAO told Kim in an April letter that it would conduct the review they asked for, it said that the work would be “within the scope of its authority” and that it would be in contact with the OIG to ensure it was not duplicating efforts.

It was reported Tuesday (June 10) that the acting director of the CFPB, Cara Petersen, resigned from her post, saying the agency’s leadership “has no intention to enforce the law in any meaningful way.”

President Donald Trump issued a regulatory freeze immediately after taking office in January, halting the implementation of all pending and recently finalized CFPB rules.