The Trump administration has launched an initiative to drastically reduce the Consumer Financial Protection Bureau’s (CFPB) workforce, aiming to eliminate nearly all of its 1,700 employees. According to employee testimonies, internal discussions about phasing out the agency have been ongoing, with layoffs scheduled in multiple phases.
Mass Layoffs in Stages
The plan, as outlined by CFPB employees, begins with terminating probationary and temporary staff. Following this, around 1,200 employees would be let go, leaving only a small workforce in place. Within 60 to 90 days, the CFPB’s operations would be nearly nonexistent, representatives said.
The restructuring comes as Elon Musk’s Department of Government Efficiency (DOGE) enters the picture. Employees reported that DOGE operatives have been significantly involved in decision-making at the CFPB, underscoring their role in pushing for extensive layoffs.
CFPB Faces Legal Challenges
These revelations surface amid legal action spearheaded by a CFPB employee union, which has temporarily halted acting Director Russell Vought’s efforts to shutter the bureau. After the initial dismissal of around 200 workers, a judicial order paused further action until a scheduled March 3 hearing.
In a legal document, Vought countered claims that the agency faced total elimination, arguing instead that the administration seeks a more “streamlined” CFPB. However, internal discussions indicate plans to reduce staff to just five mandated positions operating under legal minimum requirements.
Government Efficiency Department’s Role
The testimony describes a growing reliance on DOGE personnel for key agency decisions. Employees allege that Musk’s department requested most layoffs take place by February 14. Although the agency initially sought to comply, the court’s intervention temporarily stopped the process.
Despite gaining full access to CFPB data and systems, DOGE employees had yet to complete the agency’s cybersecurity and privacy training, according to testimony. This has raised concerns over regulatory oversight if the department continues pushing for operational control.
Political Ramifications and Legislative Oversight
The CFPB, created in response to the 2008 financial crisis under the Dodd-Frank Act, was designed to protect consumers from deceptive financial practices. The potential dissolution of the agency has ignited debates in Washington, particularly among lawmakers who support strong consumer protections.
Jonathan McKernan, President Donald Trump’s nominee to lead the CFPB, assured legislators that he would enforce laws governing the agency while aiming for a “rightsized” and “accountable” CFPB.
Senator Jack Reed, a critic of the administration’s handling of the agency, likened McKernan’s position to that of boarding the Titanic. With ongoing legal, political, and public scrutiny, the future of the CFPB remains uncertain, as stakeholders await the court’s next ruling on the matter.
