Most Americans can’t afford to lose money to corporations that cheat them or to banks and credit card companies that charge excessive fees, and they need somewhere to turn for help. They may not realize that the fine print on their car loan says the company can repossess the car after one missed payment or that a term buried several pages into their family’s home mortgage could result in foreclosure. They may not understand why their bank is withdrawing fees from their savings account or why they are charged such a high penalty when they overdraw their account a day before their paycheck is deposited. And seniors and consumers with the fewest resources may find themselves the target of financial scams.
Until recently, Americans could turn to the Consumer Financial Protection Bureau (CFPB), an agency whose primary mission is to police unfair, deceptive, and abusive financial practices by corporations. Since its creation in 2010, this formidable advocate for everyday Americans has returned more than $21 billion to consumers harmed by bad actors and implemented countless rules that protect consumers in the financial marketplace. Not surprisingly, banks, large corporations, and the billionaires who own them have long opposed these rules, which curb their ability to maximize their profits.
Now, the Trump administration and Elon Musk’s Department of Government Efficiency (DOGE) are carrying out their plan to take away those consumer protections, and a cornerstone of that plan is eliminating the CFPB. This intention was laid out clearly in Project 2025, to which acting CFPB Director Russell Vought was a key contributor. Americans should know that the Trump administration’s plan would green-light predatory practices that negatively affect their household finances.
Here are three important questions consumers and policymakers should be asking.
1) Without a strong CFPB, who will watch out for consumers and fight on their behalf for relief from predatory financial harms?
For too long, enforcement of consumer finance laws was scattered across several federal financial agencies, with the result being that consumer protection was never a top priority. Minimal oversight emboldened bad actors to peddle predatory financial products at an alarming scale. The 2007–2008 financial crisis, for instance, was fueled by banks and other lenders who used deceptive and, at times, fraudulent tactics to sell mortgages to unsuspecting borrowers. When large numbers of homeowners defaulted on those mortgages, a crisis followed in which a few Wall Street bankers reaped huge profits, even as nearly 10 million families lost their homes.
To shield Americans from rapacious financial practices, Congress established the CFPB in 2010, consolidating responsibility for consumer protection laws under one agency. It is the only federal agency tasked solely with looking out for consumers’ financial interests.
But now, the Trump administration is taking away those consumer protections. Elon Musk has called to “Delete CFPB,” while DOGE operatives have infiltrated the agency, laying off staff, shuttering its office, and halting work activities. Since February 2025, the Trump administration has fired 200 CFPB employees and directed others to cease all work, locking them out of the agency’s headquarters. In a lawsuit brought by the union representing CFPB staff, one employee described the administration’s intentions to “close down all agency systems, delete data, fire all staff, and reduce the CFPB to a ‘room’ in another agency ‘with five men and a phone.’” The administration has also sought back-channel strategies to effectively defund the agency.
Under these conditions, numerous critical functions that serve Americans, including those required by law, are being ignored daily. For example, customers facing problems with a financial transaction can submit complaints to the CFPB, with the agency then working on their behalf to contact financial institutions and businesses to get answers. Historically, 98 percent of complaints sent to companies by the CFPB have received timely responses. Yet given the stop-work order, there have likely been no or very few staff processing and resolving complaints over the past several weeks. A former CFPB official testified that there were 16,000 outstanding consumer complaints that required manual review before processing. More troubling, 75 of those complaints warned of imminent foreclosures.
It is unclear when or if the remaining CFPB employees will be allowed to fully return to their critical work. In his confirmation hearing, Trump’s nominee for CFPB director, Jonathan McKernan, committed to carrying out the CFPB’s statutory duties. But at least for now, millions of Americans must rely on banks and corporations to act in good faith. Unfortunately, history shows that when left unsupervised, many financial institutions will likely choose to maximize profit, even at the expense of everyday consumers.
2) What are the impacts of the Trump administration’s attempts to neuter consumer financial protections?
Since it was established, the CFPB has been a frequent target of corporations and their industry associations, who have launched numerous attempts—some successfully, others unsuccessfully—to severely limit the agency’s independence and capacity to carry out its consumer protection mandate. Time and again, they have opposed CFPB rules and fought against CFPB enforcement actions in court.
In particular, Musk’s website X and other Big Tech companies that are expanding into financial services stand to gain from dismantling consumer protections. Tech’s emergence into payments and other financial services prompts serious concerns related to potential misuse of consumer data, discrimination in artificial intelligence, and competition, among others. Musk is reportedly considering launching a digital payments platform on X, which would be subject to CFPB scrutiny. Musk’s access to confidential regulatory information raises a major conflict of interest as well as questions about whether it could provide X with unfair advantages over its competitors.
A team of expert technologists investigating these types of companies was fired as part of Trump and Musk’s sweeping layoffs. Under the prior administration, the CFPB inquired about large tech companies’ payments platforms and their consumer protection policies. These companies, which are increasingly offering bank-like services, have attempted to distance themselves from traditional banks to avoid being subject to more stringent oversight. The industry pushed against a rule that would enable the CFPB to identify and supervise certain large digital payment companies, and congressional Republicans are now carrying out Trump’s agenda by introducing a resolution to rescind this rule. Moreover, Google, which operates Google Wallet, sued the CFPB when it attempted to bring the company under federal oversight.
Concerningly, the Trump administration’s CFPB paused finalization of 38 pending enforcement cases against banks and other corporations; several of those cases were subsequently dismissed. The cases sought redress for many alleged transgressions by financial institutions that included pushing borrowers into costly mobile home loans and illegally collecting on loans student borrowers no longer owed. In addition, the Trump CFPB dropped a case against Capital One for allegedly misleading customers out of $2 billion in interest on savings account products. And earlier this month, the agency dismissed a case against the operator of payment app Zelle along with three of its owner banks—Bank of America, JPMorgan Chase, and Wells Fargo—for allegedly failing to implement consumer protections and allowing more than $870 million in fraudulent transactions.
Such curbing of enforcement will likely enrich corporations at the expense of consumers.
3) Who stands to benefit from increasing bank fees?
Credit card companies, banks, and other financial service providers charge a wide range of fees. In some instances, these fees may be “junk fees,” excessive or undisclosed fees that increase the price of a financial product and catch customers by surprise. Regardless, banks benefit from these fees, which pad their profits.
In particular, overdraft fees—which occur when an individual makes a transaction that exceeds the amount in their checking account—generated $12.6 billion in revenue for banks in 2019 alone. About 23 million households are charged overdraft fees annually, and these charges often target those most marginalized in the consumer financial marketplace. The Federal Reserve Bank of Cleveland even observed that revenue from overdraft fees “may make low-balance accounts more profitable and thus incentivize banks to open accounts for a wider range of customers.” Indeed, just 9 percent of account holders—with a median end-of-day balance of less than $350—pay almost 80 percent of overdraft and nonsufficient funds fees.
In 2024, the CFPB finalized a rule lowering overdraft fees, potentially saving customers up to $5 billion annually. This rule also required big banks to clearly disclose overdraft terms and reduce penalty charges. But now, congressional Republicans are moving to overturn the overdraft rule, giving banks a green light to obscure and increase these charges for customers.
In addition, the Trump administration’s stop-work order put a pause on all pending litigation, including litigation defending a CFPB rule closing a loophole that allowed banks to charge exorbitant credit card late fees. Estimates suggest the rule would have saved customers more than $10 billion a year and lowered penalties from $32 to $8. Unfortunately, the rule’s implementation has been tied up in litigation for nearly a year because of lawsuits brought by the banking industry. In light of its other actions, the Trump CFPB appears unlikely to defend the rule in court.
Conclusion
The Trump administration’s attacks on consumer guardrails won’t stop with the CFPB. In recent weeks, the administration has fired 170 Federal Deposit Insurance Corporation (FDIC) employees, and advisers to the president have reportedly expressed interest in shutting the agency down altogether. The FDIC insures that customers’ bank account deposits and provides assurance that, in times of economic panic, their money will be safe. Americans cannot afford to lose money to pernicious financial actors. Without cops on the beat, banks, corporations, and their wealthy allies wield inordinate power over Americans’ financial well-being.
About the authors: Lilith Fellowes-Granda is an associate director for financial regulation on the Inclusive Economy team at the Center for American Progress. Alexandra Thornton is the senior director of financial regulation for Inclusive Economy at American Progress.
This article was published by the Center for American Progress.
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