Donald Trump’s bid to gut the top US consumer watchdog has left the agency unable to protect consumers amid mounting fears of recession, according to workers.
For months the Trump administration has pushed to dismantle the Consumer Financial Protection Bureau and fire the vast majority of its workforce. Ripped-off Americans will have “nowhere to turn” if it succeeds, staff told the Guardian.
“The agency that Congress created after the last financial crisis to help prevent another financial crisis is currently completely handcuffed from working,” said one attorney at the CFPB, who asked to remain anonymous for fear of retaliation. “And we are on the verge of another major financial crisis, so it’s terrifying.
“The one thing we were created to do we can’t do – at a time when we’re most needed.”
Trump officials tried to axe about 1,500 of the CFPB’s 1,700 workers last month, only for his plan to be blocked by a federal judge.
“This whirlwind has been hard on everyone, but everyone comes back with more fight to keep the bureau going, because we know the harms that will be visited on people if it goes under,” said a software engineer at the agency. “When it comes to loans, mortgages, car loans, credit card debt, bank accounts, we’re out there protecting everyone.
“We have helped millions of people. We have returned billions of dollars. It isn’t the way it has to be that there is nowhere to turn to when a bank or credit card rips you off. That is something everyone is exposed to. That’s what’s heartbreaking to me about the possibility of my job disappearing.”
Jonathan McKernan, the Trump administration’s nominee to head the bureau since February, was lined up this month to be undersecretary of domestic finance at the US treasury – and the White House said it intends to rescind his nomination to lead the CFPB. No alternative nominee has been announced, fueling suspicions inside the agency that the administration never intended to move forward with McKernan’s nomination in the first place.
“I don’t think they ever intended to confirm him,” said the CFPB attorney, who noted McKernan had been nominated right before a high-stakes court hearing on the administration’s actions inside the agency. “They used that in the hearing as a way to argue they weren’t trying to close the bureau.”
McKernan’s nomination was moved forward in a Senate banking committee hearing in early March, along with three other Trump nominees. While all three were approved by the US Senate within two weeks of the hearing, McKernan was not.
Since February, the CFPB’s interim director has been Russ Vought, the White House budget office director and the architect of the rightwing Project 2025 manifesto. His term in the acting role has a cap of 210 days.
“I think the goal is to try and close the agency before Vought’s time is up as acting director, which is why they keep pressing so hard to try to be allowed to [terminate] everybody immediately,” the attorney said.
Workers also criticized the actions of the so-called “department of government efficiency” at the agency, noting the CFPB is funded by the Federal Reserve, and has returned over $21bn directly to Americans.
“They are not interested in efficiency,” said another employee. “There was no plan on how to keep congressionally mandated programs like our military veterans office running. They shot first and didn’t even bother to ask questions later. Russell Vought and this Trump administration are reckless and needlessly cruel.”
Earlier this month, the CFPB issued a list of nearly 70 policy and regulatory guidance documents it plans to rescind – including exempting medical debt from credit reports, and banning lenders from considering borrowers’ medical information during credit assessments – and fired three commissioners at the consumer product safety commission within the agency.
“To some extent, I think it’s a show to say they’re doing something,” said the attorney, who claimed many of the policy moves had been taken without explanation. “All it does is create confusion. They think they are being super business-friendly, but everything they’ve done so far is actually not at all helpful to most of the businesses we regulate.
“We’re not doing enforcement, and we’re not doing any examination against some of the worst of the worst. We want to stop the harm before it happens, because that’s better for everyone. The kinds of questions that get asked, it’s clear they don’t know what we do and they don’t care.”
The White House and Consumer Financial Protection Bureau did not respond to multiple requests for comment.
