CFPB Seeks to Shed Two-Thirds of Workforce

The Trump administration aims to get its plan to shrink the Consumer Financial Protection Bureau (CFPB) past legal challenges by reducing the scope of the cuts from nearly 90% to about 66%, Reuters reported Wednesday (April 1), citing court documents.

The Justice Department submitted this plan in filing to an appeals court, saying smaller cuts showed the administration did not aim to eliminate the CFPB, according to the report.

A lower court blocked the administration from carrying out its previous plan for cuts after ruling that the plan sought to shut down the CFPB, the report said.

Lawyers for an employee union and others have argued that the administration’s actions to reduce the size of the CFPB would be illegal and would prevent the agency from carrying out the duties required by Congress, per the report.

The New York Times reported Wednesday that a memo included in the Justice Department filing said that the CFPB had about 1,200 employees at the end of January, down from 1,750 shortly before the second Trump administration took office, and that the new plan would cut the total to 556 employees.

The White House said in February that the CFPB has cost consumers at least $237 billion since the agency was launched in 2011, largely because of the regulatory burden imposed by the agency.

Citing findings from a report by the Council of Economic Advisers (CEA), the White House said that CFPB regulations increased the compliance and liability costs associated with financial products and that financial institutions passed those costs along to consumers in the form of higher prices and reduced product offerings.

The CEA’s estimate that the CFPB has cost consumers between $237 billion and $369 billion since 2011 includes fiscal costs, higher borrowing expenses and reduced originations.

The Senate Banking Committee Minority Staff released a report earlier in February that said the CFPB has returned $21 billion to Americans who were cheated by banks and corporations.

The report also said that the Trump administration’s attack on the CFPB cost American consumers $19 billion in 2025 in the form of potential restitution to consumers that was lost due to the dismissal of enforcement actions and the potential savings that were lost due to rescinded rules and guidance.