The Trump administration will not dismantle the Consumer Financial Protection Bureau (CFPB) but will reform it to make it more “streamlined,” according to an official.
CFPB Acting Director Russell Vought said the agency’s new leadership will run a “more streamlined and efficient bureau,” according to a Department of Justice (DOJ)
court filing on Feb. 24. The filing was made in a legal challenge by a CFPB workers union that’s requesting to halt the administration’s actions targeting the agency.
DOJ attorneys said the administration’s plans for a more streamlined agency meant that it needed less office space. This is consistent with the agency’s decision to cancel the lease for its headquarters, where signage has been removed.
The agency has already terminated an unknown number of employees, and most of the staff are currently on administrative leave after Vought ordered that almost all agency work be halted.
Union officials stated in their court filings that they expect most of the staff to be dismissed.
On Feb. 14, a federal judge’s
ruling temporarily halted the Trump administration’s order allowing the removal of thousands of career federal workers at the CFPB. The ruling was in response to a lawsuit challenging the policy.
The
ruling, signed by U.S. District Judge Amy Berman Jackson, banned the administration from deleting or removing CFPB data from the system and halted firing CFPB employees without cause or notice of reduction of the workforce.
Additionally, the administration is not permitted to transfer CFPB funds to any other entity except for normal operational use to fulfill the agency’s obligations.
President Donald Trump’s original
order, signed on Jan. 20, removed thousands of managerial workers known as “policy-influencing” workers and eliminated the civil service protections that make it difficult to terminate their employment.
It’s the
job of the CFPB to
work as an agency independent of the government to “make consumer financial markets work for consumers, responsible providers, and the economy as a whole,” the CFPB website states.
For example, the agency
finalized a rule in January that banned the inclusion of medical bills on credit reports, a change that it said would benefit 15 million Americans.
The agency’s jurisdiction includes banks, credit unions, mortgage services, debt collectors, and even for-profit colleges, among other financial institutions.
The agency is
authorized to investigate institutions and initiate legal proceedings. Included in that is the ability to issue subpoenas known as civil investigative demands (CIDs) to root out potential legal violations. The CIDs can require that a target submit documents, emails, reports, answers to written questions, and oral testimony.
Reuters and Samantha Flom contributed to this report.
