The fate of the Consumer Financial Protection Bureau, or CFPB, is uncertain as the agency and its workers have faced a tumultuous month of February so far, possibly leaving consumers with more questions than answers.
Here's the latest and how it could affect consumers.
On Feb. 1, the Trump administration fired CFPB Director Rohit Chopra and appointed Office of Management and Budget director Russel Vought as the acting director of the agency who immediately ordered the CFPB to stop its work and said he would decline additional funding for the agency, USA TODAY reported.
The CFPB website's homepage went dark shortly after Vought wrote in a Feb. 8 post on X that the agency's funding was "excessive," adding, "This spigot, long contributing to CFPB's unaccountability, is now being turned off."
The shut down launched protests and a federal lawsuit by the National Treasury Employees Union, which represents CFPB staff, Reuters said, arguing Vought's actions violated the Constitution by undercutting Congress' power to set and fund the agency's mission.
However, the Trump administration agreed to pause layoffs and funding cuts at the CFPB Friday, USA TODAY reported. In the order by U.S. District Judge Amy Berman Jackson, the Trump administration "shall not delete, destroy, remove, or impair any data or other CFPB records," except as permitted by federal law until at least March 3, the date of the next court hearing.
"It is further ordered that Defendants shall not terminate any CFPB employee, except for cause," the order states.
Created after Congress and President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly referred to as the Dodd-Frank Act, in July 2010, the CFPB is an independent government agency responsible for protecting consumers in the financial industry.
Since it was created, the agency has provided more than $21 billion in consumer relief in the form of monetary compensation, principal reductions, canceled debts and more for 205 million consumers or consumer accounts, according to the bureau, but those critical of the agency have said the CFPB is exceeding its legal authority.
Under the Biden administration, the CFPB returned over $6 billion to consumers and imposed $3.2 billion in fines, according to the Consumer Federation of America.
The agency, which doesn't receive direct funding from Congress but requests its budget from the Federal Reserve, was set up with the help of Massachusetts Senator Elizabeth Warren, who said in a post to X on Feb. 10, "Understand this: by trying to kill the Consumer Financial Protection Bureau, Elon Musk and Russ Vought are trying to make it easier for big banks to cheat you. It's another way the Trump administration wants to reward the rich and powerful while hurting working people."
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While it's a bit unclear exactly how the elimination of the CFPB will affect consumers, there are some protections at risk.
Last year, the CFPB finalized rules limiting overdraft charges and credit card late fees. However, the credit card rule is currently being challenged in court by two Texas banking industry groups and the U.S. Chamber of Commerce and last week, Republican lawmakers introduced legislation to overturn the cap on overdraft fees.
The CFPB also published a rule in January banning medical debt from showing up on consumers' credit reports in an effort to protect individuals' credit. While the main credit reporting agencies as well as hospitals and their collection companies are pushing back on the rule, according to Consumer Reports, New York state passed its own legislation limiting medical debt on credit reports in 2023.
"Consumers face an increasingly complex financial marketplace dominated by AI, big tech and new digital products, making the CFPB's work more critical now than ever," says Consumer Reports' senior director of digital marketplace policy Delicia Hand. "Without strong oversight and enforcement, consumers are particularly vulnerable to predatory practices, hidden fees and data privacy violations."
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In terms of cybercrime, it won't necessarily be affected as a result of the CFPB's shut down, says Director of Information Security and Engagement at the National Cybersecurity Alliance Cliff Steinhauer, but "they are one of the entities that could help to disrupt this ecosystem."
In 2024, the CFPB proposed a rule that would regulate data brokers by limiting the sale of individuals' financial and personal information and requiring companies to receive separate, explicit authorization to obtain or share a consumer's credit report.
The CFPB has also proposed "interpretive rules" for buy now, pay later loans and paycheck advance products, which would allow consumers to dispute charges and get refunds from lenders as well as require companies offering these loans to disclose all fees and interest rates, according to Consumer Reports.
Four CFPB enforcement actions are also on the line, including lawsuits against Capital One and the owners of Zelle and a January order for CashApp to pay up to $120 million to consumers for "weak security protocols" and conditions ripe "for fraud to proliferate," Consumer Reports says.
"We need more advocates for the consumer, not less," says Steinhauer.
Contributing: USA TODAY Network and Reuters
Emily Barnes reports on consumer-related issues for the USA TODAY Network's New York Connect Team, focusing on scam and recall-related topics. Follow her on Twitter and Instagram @byemilybarnes. Get in touch at [email protected].