Several employees of the Consumer Financial Protection Bureau have been dismissed following a court decision permitting such layoffs. In this image, members of the CFPB union and supporters are seen rallying outside the agency’s headquarters last month in Washington, D.C.
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The Consumer Financial Protection Bureau has initiated the distribution of layoff notifications to its employees. This development is part of the Trump Administration’s continuing efforts to minimize the bureau and reduce its operational scope.
A notice reviewed by NPR conveyed, “This RIF action is necessary to restructure the Bureau’s operations to better reflect the agency’s priorities and mission,” referring to reduction-in-force actions.
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Laurel Wamsley is reporting on the events at CFPB. She can be reached securely via Signal at laurel.96 for tips.
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The reduction-in-force notices began reaching staff members on Thursday afternoon. The exact number of employees affected by these notices remains unclear.
These notices follow a recent ruling by a federal appeals panel, which authorized the layoffs. The three-judge panel permitted the bureau’s leaders to issue reduction-in-force notices to employees identified as non-essential for fulfilling the CFPB’s statutory duties.
The panel upheld a separate federal judge’s injunction that prohibits dismantling the agency, including preserving its data and ensuring employees are provided workspace or tools for remote work.
The CFPB has not responded to NPR’s inquiries regarding the commencement of the layoffs.
New direction for the CFPB
These layoffs come after the agency’s chief legal counsel disseminated a memo to CFPB employees on Wednesday evening, outlining a new direction for the bureau.
According to the memo obtained by NPR, Chief Legal Officer Mark Paoletta indicated the bureau plans to rely on state entities for enhanced enforcement and supervision activities, suggesting this would enable the agency to concentrate on addressing direct consumer harms.
Paoletta emphasized a shift in focus back to monitoring banks and depository institutions, such as credit unions and commercial banks.
Furthermore, he noted that the bureau would “deprioritize” various regulatory areas it has overseen in recent years, including issues related to medical debt, peer-to-peer platforms, and digital payments.
The last point is particularly significant as Elon Musk, who has made the statement “CFPB RIP” on Twitter, is developing a digital payments platform, which would potentially fall under the CFPB’s jurisdiction. Previously, Musk’s Department of Government Efficiency (DOGE) team has gained access to key systems within the bureau’s headquarters in Washington.
The CFPB, established in response to the 2008 financial crisis, has been targeted by the Trump administration as well as certain Silicon Valley entities and Wall Street, accusing it of regulatory overreach.
Consumer organizations have criticized the bureau’s shift in focus as outlined in Paoletta’s memo, describing it as a significant departure from its mission. Lauren Saunders, associate director of the National Consumer Law Center, remarked, “The CFPB cannot simply shirk the consumer protection responsibilities Congress gave it and expect states to enforce federal law.”
