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• The Consumer Financial Protection Bureau (CFPB) is undergoing significant layoffs, reducing its workforce from approximately 1,700 to just over 200 employees.
• The layoffs are part of a broader effort by the Trump administration to downsize and refocus the agency’s mission.
• The CFPB will prioritize issues related to mortgages and tangible consumer harms, while scaling back efforts in areas like medical debt, student loans, and digital payments.

Quick Brief

2-Minute Digest

Essential Context

The Consumer Financial Protection Bureau, created in response to the 2008 financial crisis, is being drastically downsized by the Trump administration. This move follows a memo from the bureau’s chief legal officer, Mark Paoletta, outlining a shift in the agency’s focus towards addressing tangible harms to consumers.

Core Players

• Donald Trump – President Trump, driving the downsizing and refocusing of the CFPB.
• Mark Paoletta – Chief legal officer of the CFPB, responsible for the memo outlining the agency’s new priorities.
• Russell Vought – Acting Director of the CFPB and head of the Office of Management and Budget (OMB).
• Jonathan McKernan – Nominated to serve as the CFPB director, pending Senate consideration.

Key Numbers

• 1,500+ – Number of employees receiving layoff notices.
• 200 – Approximate number of remaining CFPB employees after the layoffs.
• 50% – Reduction in the number of supervisory “events” or exams by the CFPB’s supervision arm.
• 70% – Percentage of CFPB supervision focused on banks and depository institutions in 2012, a ratio the agency is returning to.

Full Depth

Complete Coverage

The Catalyst

The layoffs at the CFPB are the result of a broader effort by the Trump administration to reshape the federal government. A recent court ruling cleared the way for these firings, which align with a memo from Mark Paoletta outlining the agency’s new priorities.

“To focus on tangible harms to consumers, the Bureau will shift resources away from enforcement and supervision that can be done by the States,” Paoletta wrote.

Inside Forces

The CFPB’s new focus will prioritize issues related to mortgages, while reducing efforts in areas such as medical debt, student loans, and digital payments. The agency’s supervision arm will reduce the number of supervisory events by 50%, focusing on conciliation, correction, and remediation of consumer complaints.

The agency will also return to a 2012 mix where 70% of its supervision is on banks and depository institutions, and 30% on non-depository institutions.

Power Dynamics

The Trump administration, through Russell Vought and the Office of Management and Budget, has significant influence over the CFPB’s restructuring. Vought ordered the agency to stop nearly all of its work in February, setting the stage for these layoffs.

The nomination of Jonathan McKernan as the CFPB director, pending Senate approval, further solidifies the administration’s control over the agency’s direction.

Outside Impact

The downsizing and refocusing of the CFPB have broader implications for consumer protection. Consumer advocacy groups are concerned about reduced oversight in critical areas, while financial institutions may see a decrease in regulatory scrutiny.

The shift away from state-level enforcement and supervision could lead to inconsistent consumer protection across different states.

Future Forces

Looking ahead, the CFPB’s new priorities will likely shape the regulatory landscape for financial institutions. Key areas to watch include:

• Mortgage regulation and enforcement.
• Data furnishing violations and consumer contracts.
• Fraudulent overcharges and fees.
• Protection of consumer information.

Data Points

• 2008: The CFPB was created in response to the financial crisis.
• February 2025: Russell Vought ordered the CFPB to stop nearly all of its work.
• April 17, 2025: Layoff notices were sent to over 1,500 CFPB employees.
• April 2025: The CFPB’s new priorities were outlined in a memo by Mark Paoletta.