Lisa Rosenthal's career gives you a sense of the scope of the watchdog duties at the Consumer Financial Protection Bureau. For 13 years as an attorney there, she helped victims of predatory payday loans, trained staff to go after abusive practices at financial institutions and supervised teams working on everything from the student loan market to auto financing to debt collection.
But in early 2025, she says, she was told to stop all work.
"We were in this very bizarre situation. The offices were closed. We weren't on leave," Rosenthal said. "We're just sitting at home, staring at our computer screens, not able to do work."
One of the priorities of the Trump administration during President Trump's first year back in office has been a dismantling of the agency. In 2025, CFPB employees faced orders to halt work, as well as attempts by the administration to cut their funding and lay off the majority of the staff.
Congress created the CFPB in 2010 after the 2008 financial crisis to protect consumers against fraud and predatory practices. The brainchild of Democratic Sen. Elizabeth Warren of Massachusetts, the agency took on the consumer protection duties of other agencies, put them under one roof and acquired new supervising and rule-making powers.
Overall, the agency reported that as of Jan. 30, 2025, it had returned $19.7 billion to consumers since its creation.
But the agency's conservative critics have long accused the CFPB of overreaching, punishing small lenders and harming businesses. And now one of those critics runs the agency. Trump named Russell Vought, who also directs the Office of Management and Budget, as the CFPB's acting director in February 2025.
Neither the CFPB nor the Office of Management and Budget returned a request for comment. But Vought was one of the architects of the conservative policy agenda Project 2025, which called on Congress to abolish the CFPB. And he has criticized the agency in interviews like the one he gave to The Charlie Kirk Show in October, where he said of some CFPB staffers: "All they want to do is weaponize the tools of financial law against basically small mom-and-pop lenders and other small financial institutions."
One of his first actions in February was emailing workers, telling them to stop working.
Rosenthal resigned. "This work that I had carried out for these decades and that I cared so deeply about — this was no longer that work," she said.
Then in April, about 1,400 of the workers who chose to stay received layoff notices, which would have left roughly 200 workers.
The National Treasury Employees Union, the union representing CFPB employees, sued.
The legal battle over those layoffs is currently at a standstill. A District Court judge ordered a temporary injunction to halt the layoffs and other actions, such as deleting records, while the legal fight plays out.
A battle begins over funding
Meanwhile, a new battle was beginning over funding. Congress slashed the agency's budget nearly in half in July as part of the One Big Beautiful Bill Act.
Later in the year, the administration made a legal argument that because the agency gets its funding from the Federal Reserve, and since the Fed is technically operating at a loss, there are no funds that can be allocated to the CFPB. A coalition of state attorneys general sued in response.
In late December, that same District Court judge rejected the administration's argument and ordered Vought to request the funds — which he did. In her order, the judge wrote that the administration is "actively and unabashedly trying to shut the agency down" — this time through funding cuts rather than layoffs — and that the CFPB "is hanging by a thread." She has yet to make a final order on the case.
Diminished CFPB leaves a consumer protection gap
Since the February stop-work order, some of the agency's duties have resumed, like Helen Shaw's role examining interstate land sales — essentially, making sure property developers are sharing accurate information with potential buyers.
"We continue to get filings from property developers, so that has been functioning normally," Shaw said.
But in a recent performance report to Congress, the agency's current leadership wrote that other work has been rolled back or halted. Under the Biden administration, the leadership wrote, "the CFPB regularly engaged in an overreach of its statutory mandate via punishment of disfavored industries. This overreach and weaponization of the government manifested especially clearly in burdensome regulations and guidance; in extensive and onerous supervisions; in investigations and cases, frequently leading to crushing penalties and injunctive terms unrelated to actual harm."
As a result, the agency's leadership continued, under Vought the agency had taken "remedial actions," including "withdrawing inappropriate regulations and guidance documents, terminating certain consent orders, and withdrawing or dismissing cases that never should have been brought."
At the same time the agency is drawing back, complaints about businesses sent to the CFPB were up 89% last December compared with the previous December, according to the agency's website. Shaw is not confident those complaints are being followed up on while the agency is in its diminished state.
Even some critics of the agency have been worried by the administration's aggressive steps to slash it.
Norbert Michel, who runs the Cato Institute's Center for Monetary and Financial Alternatives, argues that the bureau should never have been created and that other agencies should be responsible for enforcing consumer financial protection laws. But he thinks it should be Congress dismantling the agency, not the administration. And he's concerned that there isn't any legislation instructing other agencies to fill in the consumer protection gap.
"Now you have a lot of those things that are not being done," Michel said. "I'm conflicted."
Some state and local officials have taken on some of this enforcement. For example, Capital One recently agreed to pay $425 million in restitution following an investigation led by New York Attorney General Letitia James, who accused the bank of misleading customers about interest rates.
Rohit Chopra, the former director of the CFPB, who was fired at the start of Trump's current term, said he has seen other state attorneys general also stepping up. "While they're no substitute for a full-fledged federal agency, they are working hard to make sure they are cracking down on crime and standing up for consumers," Chopra said.
An agency intertwined with affordability is sidelined
Julie Margetta Morgan was once the CFPB's associate director of research, monitoring and regulations; she was a political appointee during the Biden administration. She now criticizes the Trump administration and Congress for sidelining the CFPB while the president says he's making affordability a priority.
"At the same time now where we see Donald Trump pledging that he's solving an affordability crisis, he's also jacking up costs by obliterating rules that the CFPB had put in place," Morgan said.
For example, she says, in 2024 the agency closed a loophole in order to limit the overdraft fees that banks could charge, estimating that it would save Americans $5 billion each year. Congress repealed that rule in September.
And nearly two years ago, the agency ruled that users of buy-now, pay-later loans should have the same rights as credit card users, such as the right to dispute charges and get refunds. The CFPB under the Trump administration announced that it would not prioritize enforcing that rule.
Recently, to address affordability, Trump has said Republicans should support legislation meant to lower swipe fees that merchants pay when a customer uses a credit card, which sometimes get built into prices. He also proposed a one-year 10% cap on credit card interest rates — there are already bills supporting that cap in both the House and Senate, but so far, none of them has gone anywhere.
Shaw said enforcing that cap would naturally be the CFPB's job. But, she added, "It's confusing, right? Because they're stating that they're pursuing ways to alleviate the affordability crisis for families, yet we're not fully functional right now."
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