CFPB Seeks To Shed Two-Thirds Of Workforce

April 1, 2026 11:59 pm
RMAi-Certified Debt Buyer
Source: site

The administration is actively pursuing a steep downsizing of the CFPB, but the exact scope and timing depend on ongoing litigation and funding decisions.

What is being proposed now

  • In March 2026, DOJ filed a plan in the D.C. Circuit for a reduction‑in‑force (RIF) that would cut about half of CFPB’s remaining staff, leaving 556 employees, down from 1,174 at the start of FY 2026.

  • This proposal replaces an earlier plan under which the administration sought authority to terminate up to 90% of the Bureau’s workforce.

How we got here

  • Beginning in early 2025, leadership moved to halt work, cut contracts, and sharply reduce supervision and enforcement while planning RIFs across core divisions.

  • GAO’s initial report describes a planned RIF of roughly 88% of staff as of April 2025, including around 90% of Supervision and 80% of Enforcement, along with closure of headquarters and regional offices.

  • Litigation by the union and affected employees led a district court to pause mass RIFs; the D.C. Circuit has been weighing the legality of those efforts and the agency’s future structure.

Funding and structural pressure

  • Congress cut the statutory cap on CFPB’s Fed-based funding from 12% of Federal Reserve operating expenses to 6.5%, significantly constraining its budget (about 823 million in FY 2025).

  • The administration has repeatedly declined to request full funding and has used reduced appropriations plus work stoppages to justify downsizing.

  • DOJ created an Enforcement and Affirmative Litigation Branch in its Civil Division in 2025, and CFPB enforcement staff have been told that a substantial portion of their work would migrate there in 2026.

What’s already happened to the workforce

  • Since Trump’s return to office, the Bureau has already lost roughly a quarter of its pre‑2025 staff through attrition and early separations.

  • Management has unilaterally altered the collective bargaining agreement, cut supplemental benefits (dental, vision, term life), curbed bonuses, and changed locality pay in ways that effectively reduce compensation.

  • These steps, together with VSIP/VERA‑type programs and other separation incentives, have been part of a broader federal effort to shrink the civil service in 2025–2026.

What’s uncertain

  • The March 2026 RIF plan still requires court approval, and unions continue to litigate both the layoffs and changes to pay/benefits.

  • GAO has signaled it will issue a follow‑up report assessing the actual impact of the workforce cuts and restructuring on CFPB’s ability to fulfill its statutory mandate, but that assessment is not yet complete.

  • There is ongoing policy debate over how much consumer‑financial enforcement will be absorbed by DOJ, prudential regulators, and states if CFPB is reduced to a much smaller shell.

The Trump administration aims to get its plan to shrink the Consumer Financial Protection Bureau (CFPB) past legal challenges by reducing the scope of the cuts from nearly 90% to about 66%, Reuters reported Wednesday (April 1), citing court documents.

The Justice Department submitted this plan in filing to an appeals court, saying smaller cuts showed the administration did not aim to eliminate the CFPB, according to the report.

A lower court blocked the administration from carrying out its previous plan for cuts after ruling that the plan sought to shut down the CFPB, the report said.

Lawyers for an employee union and others have argued that the administration’s actions to reduce the size of the CFPB would be illegal and would prevent the agency from carrying out the duties required by Congress, per the report.

The New York Times reported Wednesday that a memo included in the Justice Department filing said that the CFPB had about 1,200 employees at the end of January, down from 1,750 shortly before the second Trump administration took office, and that the new plan would cut the total to 556 employees.

The White House said in February that the CFPB has cost consumers at least $237 billion since the agency was launched in 2011, largely because of the regulatory burden imposed by the agency.

Citing findings from a report by the Council of Economic Advisers (CEA), the White House said that CFPB regulations increased the compliance and liability costs associated with financial products and that financial institutions passed those costs along to consumers in the form of higher prices and reduced product offerings.

The CEA’s estimate that the CFPB has cost consumers between $237 billion and $369 billion since 2011 includes fiscal costs, higher borrowing expenses and reduced originations.

The Senate Banking Committee Minority Staff released a report earlier in February that said the CFPB has returned $21 billion to Americans who were cheated by banks and corporations.

The report also said that the Trump administration’s attack on the CFPB cost American consumers $19 billion in 2025 in the form of potential restitution to consumers that was lost due to the dismissal of enforcement actions and the potential savings that were lost due to rescinded rules and guidance.

© Copyright 2026 Credit and Collection News

Privacy Policy