White House plans drastic cuts to CFPB, endangering consumer protections

The White House has proposed major cuts to the Consumer Financial Protection Bureau (CFPB), with plans to lay off up to 90% of its workforce, a move currently blocked by a federal judge pending further review. Proponents of the downsizing argue that the CFPB has exceeded its legal authority and engaged in redundant or intrusive enforcement actions, while critics warn that reducing the agency's scope will leave consumers more vulnerable to financial abuse and fraud. Some Republicans claim that state regulators and other federal agencies can fill the gap left by a diminished CFPB, but Democratic lawmakers and policy experts counter that states lack the resources and authority to supervise large national financial institutions. The administration has also moved to stop the CFPB's previous practice of 'regulation through guidance,' stating that it improperly imposed obligations outside of the legally required rulemaking process. The fate of the CFPB's workforce and enforcement priorities remains uncertain as legal and political battles continue.