Petersen said CFPB leadership under President Donald Trump “has no intention to enforce the law in any meaningful way,” Reuters reported Tuesday (June 10), citing an email it saw.
“I have served under every director and acting director in the bureau’s history, and never before have I seen the ability to perform our core mission so under attack,” said Petersen, who had been with the CFPB for nearly 15 years, per Reuters. “It has been devastating to see the bureau’s enforcement function being dismantled through thoughtless reductions in staff, inexplicable dismissals of cases, and terminations of negotiated settlements that let wrongdoers off the hook.”
Petersen’s resignation came months after the CFPB’s enforcement and supervision chiefs also stepped down amid the administration’s push to dismantle the agency, the report said.
Aside from trying to cut the CFPB’s workforce by about 90%, Acting Director Russell Vought and Chief Legal Officer Mark Paoletta have said they will reduce agency enforcement and supervision. The new leadership has also dropped majorCFPB enforcement cases, including ones involving Capital One and Walmart.
Meanwhile, the agency’s funding is also in question. The Senate Banking Committee — in its work on Trump’s so-called megabill — created a provision in that legislation that would cancel funding for the CFPB from the Federal Reserve.
“In terms of the mechanics of the CFPB’s funding sources, the CFPB has traditionally been funded by the Fed,” PYMNTS wrote Monday (June 9). “The key metric has been that the funds have not been allowed to exceed a ceiling of 12% of the Fed’s operating expenses recorded in 2009.”
The CFPB said in its latest financial report that the transfer cap, as detailed in fiscal 2024, came to $785.4 million. The Senate provisions released last week would set that cap at 0%.
With the CFPB’s future uncertain, some states have begun beefing up their consumer protection regulations, PYMNTS wrote Tuesday.
That report described a “flurry of activity at the state level where lawmakers and attorneys general are, in effect, stepping in for the bureau, levying lawsuits and legislation that treads ground typically covered by the consumer-focused watchdog.”
As for the providers, “the state-by-state level actions mean there’s an increasingly fragmented regulatory terrain to navigate,” the report said.
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