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Consumer watchdog's future murky

Layoffs, budget cuts end, but mission is in limbo

By: Daniel De Vise
USA Today

..... The Trump administration has agreed to pause layoffs and funding cuts at the Consumer Financial Protection bureau, the federal agency responsible for cracking down on "junk" fees and answering consumer complaints in the finance industry> In a Friday [02/14/2025] order, U.S. District Judge Amy Berman Jackson said Trump officials had agreed not to terminate workers, delete the agency's data or raid its coffers, at least for now.
..... It's the latest move in an unfolding drama over the fate of a high-profile federal watchdog agency that Trump has targeted for shutdown in the early days of his second term.
..... The judge;s order states that the Trump administration "shall not delete, destroy, remove, or impair any data or other CFPB records, except as permitted by federal law. The order also forbids the administration to "terminate any CFPB employee, except for cause."
..... On February 1, [2025] Trump officials fired CPPB director Rohit Chopra. They installed a new director, Russell Vought, who promptly ordered the agency to halt its work and shut its doors.

Musk says 'CFPB RIP'

..... Elon Musk, the billionaire tasked with slashing Beltway budgets, broadcast Trump's evident intentions, and his own, in a February 7 [2025] tweet that read, "CFPB RIIP," along with a tombstone emoji.
..... The CFPB was formed after the 2008 financial crisis to protect consumes from fraud. Modeled on an idea from Senator Elizabeth Warren, the Massachusetts Democrat, the agency has drawn sharp criticism form leaders of the financial industry and, more recently, form the new Trump administration.
..... But Jerome Powell, the Federal Reserve chair, testified Tuesday [02/18/2025] that "no other federal regulator" exists to hold large banks accountable for following consumer protection rules.

Billions returned to consumers

..... In a 2023 report, the CFPB said it had put a cumulative $17.5 billion "back in Americans' pockets" in compensation, canceled debts and provided other consumer relief. Banking industry leaders counter that the agency has far exceeded tis congressional mandate.
..... In March 2024, the agency capped most credit card late fees at $8. The typical fee had been $32.
..... In December, [2024] the CFPB capped most bank overdraft fees at $5. The typical fee exceeded $25.
..... Now, the future of those initiatives is in limbo. Last week [02/13/2025] Republican lawmakers introduced legislation to overturn the $5 cap on overdraft fees. They argued that higher fees "promote financial discipline and responsibility."

'Page not found'

..... On Sunday, [02/16/2025] teh CFPB home page carried a message increasingly common on government websites: '404: Page not found."
..... Agency officials fired probationary workers in an email Tuesday, [02/11/2025] according to Government Executive, a publication that covers federal business. On Thursday, [02/13/2025] termination notices went out to workers on contracts, according to Reuters. Together, those employees number nearly 200 out of a 1,700-person CFPB workforce, according to The New York Times.
..... An employee union filed suit to challenge the shutdown. On Friday [02/14/2025] in court, attorneys siad they feared agents of Musk's Department of Goverment Effeciency would remove eyars' worht of valable data.
..... The judge's order calls for no further firings, and no data purge, until at least the next court hearing March 3. [2025]

Reactions along party lines

..... With the agency shuttered, "Congress can put consumer protection laws back where it belongs - with real regulators - not Elizabeth Warren's unchecked, unaccountable CFPB," wrote Representative Andy Barr, the Kentucky Republican, in a February 12 [2025] post on X.
..... The next day, Warren tweeted a reference to a new payment platform Musk is said to be developing X Money.
..... "Guess which agency would be making suer that Elon's new project couldn't scam you or steal your sensitive person data?" Warren wrote. "The CFPB."

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