The Consumer Financial Protection Bureau (CFPB), a watchdog agency created after the 2008 financial crisis, is facing drastic changes under the Trump administration. The bureau has shuttered its Washington D.C. offices, laid off hundreds of employees, and imposed strict conditions on the remaining staff.
Consumer advocates warn that this downsizing could have severe consequences for consumers. Lauren Saunders, associate director at the National Consumer Law Center, says that a less active CFPB would leave consumers with fewer protections against financial institutions’ potential harm.
“If you have a mortgage or a bank account, the lack of a watchdog to make sure you’re protected and safe in your financial activities is going to have devastating effects,” Saunders said. “Consumers will have to be much more vigilant in checking their credit reports, bank statements, and fees.”
The CFPB regulates financial products and services, such as credit cards, bank accounts, online payments, and credit reporting. It brings lawsuits against financial institutions operating outside of current laws and creates new rules for financial firms.
With the agency’s actions on hold, consumer advocates are concerned that consumers will have to take matters into their own hands, using social media, talking to state attorneys general, and complaining to companies to get attention for potential issues. Mark Hamrick, senior economic analyst at Bankrate, agrees that consumers will need to be more proactive in protecting themselves.
“Consumers don’t take the time to read the fine print,” he said. “We have regulators like the CFPB to do the work that consumers can’t do themselves.”
Source: https://www.cnbc.com/2025/03/05/trump-administration-plans-to-wind-down-the-cfpb.html