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The Federal Reserve’s Office of the Inspector General has launched a formal review into actions taken during the Trump administration to significantly reduce the operational capacity of the Consumer Financial Protection Bureau (CFPB). This includes widespread layoffs of staff and the termination of contracts essential to the agency’s enforcement functions.
The review aims to determine whether these decisions were carried out in accordance with federal law and whether they undermined the CFPB’s mission to protect American consumers from unfair or abusive financial practices. The Consumer Bureau, established in the aftermath of the 2008 financial crisis, plays a key role in overseeing financial institutions and enforcing consumer protection laws.
Parallel to the Inspector General's investigation, the Government Accountability Office is conducting its own assessment. Both efforts come amid growing concern that the scaling back of the agency's work during the previous administration weakened its ability to hold financial entities accountable.
Recent changes within the CFPB leadership, including several resignations, have further raised questions about the agency’s current enforcement strength. Critics argue that the rollback may have lasting effects on consumer protections, especially in areas such as predatory lending, debt collection, and credit reporting.
The outcomes of these reviews could have important implications for the future direction and independence of the CFPB under the current administration.
Photo: Nathan Howard | Reuters
