Attempted Staff Purge at the Consumer Financial Protection Bureau Follows Trump’s Sweeping Midnight Pullback of Supervision and Enforcement; Experts Project Surge in Financial Fraud
April 17, 2025 | WASHINGTON, D.C. — Moments ago, Fox Business reported that the Trump Administration was attempting to execute a purge of the vast majority of employees at the Consumer Financial Protection Bureau (CFPB). According to public reporting, 1500 of 1700 employees across the agency received “Reduction in Force” notifications, placing them on administrative leave effective tomorrow and terminating their employment in 60 days.
This unprecedented and illegal attempt to dismantle the consumer watchdog comes after a panel of federal judges ordered the agency to refrain from mass firings, limiting the Trump Administration’s discretion to terminate CFPB staff. Earlier this year, a different federal court ordered the Trump Administration to halt all firings at the CFPB after evidence demonstrated that the administration intended to dismantle the agency in its entirety. It remains unclear how any of the agency’s functions, including the routine supervision of the largest financial companies in the world, can continue should these illegal mass firings succeed.
In response, former senior CFPB officials issued the following statements:
“We are watching a surge in financial fraud, as big banks and so-called fintechs target people and take their money,” said Eric Halperin, who previously served as CFPB Enforcement Director. “Instead of fighting against fraud and for working people, Donald Trump and Russ Vought have fired hundreds of law enforcement officials and are letting corporate criminals off the hook.”
“Fifteen years ago, Congress directed the CFPB to supervise the biggest and riskiest financial companies to protect working families and prevent the next financial crisis,” said Lorelei Salas, who previously served as CFPB Supervision Director. “Today, Donald Trump and Russ Vought brazenly defied a court’s order because they care more about the bottom line of their billionaire benefactors than they do about the American people or the law.”
“Russ Vought’s brazen attempts to dismantle CFPB are reckless, illegal, and an insult to the American people,” said Seth Frotman, who previously served as CFPB General Counsel. “When students are cheated by scam schools, servicemembers are ripped off by predatory lenders, and our parents are robbed of their retirement savings, Americans will remember that this was Trump’s legacy.”
“Candidate Trump promised to fight for working people and lower costs for all Americans—but with each new action to gut the CFPB, President Trump proves that Candidate Trump was lying,” said SBPC Executive Director Mike Pierce, who previously served as a senior CFPB official overseeing the student loan market under Presidents Obama and Trump. “For more than a decade, the CFPB fought for our families against big banks and big tech companies engaged in financial fraud. Trump’s illegal and shocking efforts to dismantle the CFPB make it clear: Trump will Make Corporate Crime Great Again.”
The consumer watchdog protects families from financial fraud by big banks, big tech, and other finance companies across the economy. It has returned more than $21 billion to American families since it was created by Congress in the aftermath of the 2008 financial crisis.
In a memo shared with CFPB staff late last night, Chief Legal Officer Mark Paoletta announced a sweeping pullback of the agency’s core supervision and enforcement work across financial markets. This includes “deprioritizing” oversight of student loans, medical debt, and peer-to-peer lending—as first reported by Brian Schwartz of the Wall Street Journal.
Further Reading
SBPC and Consumer Federation of America (CFA) blog post on the fight to defend CFPB: Trump Trashes the Economy and Leaves Americans Vulnerable: Two Disastrous Months of Trump’s CFPB
SBPC and CFA memo on repeat offenders and CFPB enforcement: As House Financial Services Committee Majority Lines Up Industry Witnesses to Bash CFPB, Consumer Advocates Issue Rap Sheet Highlighting More Than $3 Billion in Harm Caused by Corporate Repeat Offenders
SBPC warns state AGs of emerging tech scam: As CFPB Enforcement Folds, Predatory Tech Company Prehired Defies Government Order to Cease Operations and Continues Defrauding Students
SBPC and CFA memo identifying 87 congressionally imposed mandates Director Vought is refusing to perform: Advocates Applaud Lawsuits Challenging Trump and Vought’s Corrupt and Unlawful Attempt to “Delete” Consumer Watchdog Agency, CFPB
SBPC press release on federal court temporary blocking Trump, Musk, and Vought from dismantling the CFPB: In a Major Victory for Americans, Federal Court Blocks Trump, Musk, Vought Effort to Dismantle the Consumer Financial Protection Bureau
SBPC blog on Musk and DOGE illegal attempt to “delete” CFPB: Elon and DOGE Are Attempting To Illegally “Delete” the CFPB, Here Is Why This Matters To Student Loan Borrowers
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About Student Borrower Protection Center
Student Borrower Protection Center (SBPC) is a nonprofit organization focused on eliminating the burden of student debt for millions of Americans. We engage in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance racial and economic justice.
Learn more at protectborrowers.org or follow SBPC on Twitter @theSBPC.