Consumer Watchdog Agency Shifts Focus to Corporate Interests Under Trump

The Consumer Financial Protection Bureau (CFPB) has increasingly shifted from its foundational role as a consumer advocate to acting as a defender of corporate interests. Under the current leadership appointed during the Trump administration, the agency has not only halted aggressive enforcement actions but has also begun undoing previous regulatory wins, including those secured during the early years of the same administration.

This transformation, coupled with widespread concerns about administrative corruption, highlights a troubling tolerance for corporate misconduct. It underscores a clear prioritization of the agendas of major banks, technology firms, and some of the world’s largest financial institutions over consumer protection.

The agency’s Washington offices have seen drastic operational disruptions, largely driven by efforts linked to government efficiency initiatives. Despite court interventions preventing mass layoffs, a significant portion of the CFPB’s workforce has been sidelined, leading to a near shutdown of many critical functions. By March, the consumer complaint system, a vital resource for Americans dealing with issues related to banks, mortgage lenders, and student loan servicers, was burdened with a backlog exceeding 16,000 unresolved cases.

However, a segment of the agency remains active: the faction led by acting director Russell Vought and chief legal officer Mark Paoletta, the highest-ranking appointees of the Trump era. This group has been instrumental in not only granting what can be described as corporate reprieves to large financial entities but also in attempting to reopen and reverse settled enforcement cases. Alarmingly, some actions have rescinded or reduced financial penalties and consumer compensation previously awarded.

Recently, the administration quietly withdrew a $60 million settlement with Toyota Motor Credit without providing any public explanation. The agreement, reached in 2023, involved $48 million designated for consumer restitution after the company was found to have obstructed car buyers from cancelling unwanted products through a confusing hotline, issued incorrect refunds, and damaged customers' credit reports with inaccurate data. Shortly after, penalties against Wise, a payment platform accused of misleading customers, were slashed from over $2 million to roughly $45,000.

Even enforcement victories dating back to President Trump’s first term are being undermined. For instance, the CFPB initially upheld a 2017 settlement against the National Collegiate Student Loan Trusts, which was charged with collecting on student loans without proving ownership. Despite initial defense, the case was abruptly dismissed in April under the current leadership. Additionally, the agency has petitioned courts to overturn a settlement with a mortgage company accused of discriminating against Black borrowers, another case initiated during the early Trump administration.