The Consumer Financial Protection Bureau (CFPB) is facing scrutiny over its actions during the Trump administration’s shutdown orders, which critics say have crippled the agency’s ability to enforce consumer protection laws. In response to a lawsuit filed by the National Trade Union Committee on Retirement Investment (NTEU), CFPB officials have clarified and walked back some of their statements regarding the shutdown orders.
The NTEU lawsuit alleges that the CFPB’s actions during the shutdown period were unlawful and led to delays in processing consumer complaints, responding to emergencies, and addressing civil penalty claims. The agency has faced intense scrutiny over its handling of sensitive cases, including those related to foreclosure prevention, identity theft, and financial settlements.
According to court filings and internal emails obtained by Bloomberg Law, CFPB officials have been at odds over the shutdown orders, with some arguing that employees should be performing legally mandated work without prior approval. However, others, including Director J. Christopher holding office under the Biden administration (as of this writing), disagree, citing concerns about employee safety and the need for careful oversight.
The CFPB’s response to the lawsuit has highlighted ongoing tensions within the agency. Some officials have stated that they activated “critical statutory responsibilities” in various units, while others have disputed these claims, pointing out that certain programs and services were halted due to the shutdown orders.
One of the most contentious issues is the handling of consumer complaints. The CFPB’s call center was closed during the shutdown period, leaving consumers unable to get assistance with pressing issues like foreclosure prevention. In a court filing, Matthew Pfaff, the chief of staff for the CFPB’s Office of Consumer Response, acknowledged that escalated cases were not being addressed due to the agency’s on administrative leave.
The situation is likely to continue in the courts, with the NTEU lawsuit set to be heard by Judge Amy Berman Jackson. The outcome will have significant implications for the CFPB’s ability to enforce consumer protection laws and protect consumers’ rights during times of crisis.
In a statement, the Biden administration said that it is committed to ensuring the CFPB operates effectively and efficiently in protecting American consumers.
The case is NTEU v. Vought, D.D.C., No. 1:25-cv-00381.
Source: https://news.bloomberglaw.com/banking-law/the-reality-behind-cfpb-contradictions-that-raised-judges-ire