Trump’s CFPB Funding Cuts Threaten Consumer Safeguards

Consumer protections face a funding cliff as political winds shift in Washington.

The Budget Axe Swings

Proposed cuts target the Consumer Financial Protection Bureau's enforcement and oversight divisions. Watchdog operations—the ones that sniff out predatory lending and hidden fees—get hollowed out first.

Bypassing the Guardrails

Reduced funding means fewer examiners in the field and slower response times to complaints. It creates openings for bad actors to slip through the cracks—because nothing says 'financial innovation' like resurrecting fees we all thought were buried.

The move signals a broader deregulatory push, betting that market discipline alone can protect your wallet. A bold assumption in an industry that once needed a law to stop it from literally betting against its own clients.

White House tries to fire workers and reroute enforcement

The TRUMP administration is trying to fire as many as 90% of CFPB employees and stop the agency from getting more money. Vought, in an October podcast appearance, said he has no plans to keep it running.

The Federal Reserve, which funds the CFPB, was told it needs to return to what the administration calls “profitability” before more money can be requested. That argument got tossed out by a federal judge this week, who called it legally baseless. But that hasn’t stopped the machine. In July, Congressional Republicans cut the CFPB’s max funding limit.

Since then, a decade of consumer finance rules have been dismantled. We’re talking protections around student loans, credit card fees, mortgages, and overdraft charges. Most of the watchdog’s pending actions have either been paused or dropped altogether.

Insiders are quitting. Oversight is crumbling. The agency has basically stopped checking in on the very industries it was made to watch.

People who rely on the CFPB have noticed. Reuters spoke to lawyers, counselors, and broke Americans who said they’re scared. The agency was their only help against creditors who play dirty. With it fading, people with medical bills, job losses, or bad luck say they’ll be left alone with financial predators.

Elizabeth Warren warns no other agency protects consumers first

Elizabeth, reflecting on her time as a bankruptcy law professor, said the system used to be chaos. “I was stunned by the number of people in financial trouble who had lost a job or got sick but who had also been cheated by one or more of their creditors,” she said.

She said no other agency put consumer protection first. Most agencies, she said, treated it as an afterthought, somewhere between fifth and tenth on the priority list.

With no CFPB, people getting scammed have no backup. The agency used to go after shady lenders and hold them accountable. Now, Trump’s team wants that job shifted elsewhere, which critics say means nowhere.

Meanwhile, over in China, the government is doing the exact opposite; pumping money into consumer protections. Xinhua, the country’s state media, reported that 62.5 billion yuan in long-term bond funds is being given to local governments to support a 2026 subsidy program.

The plan gives Chinese citizens cash back when they swap out old fridges, TVs, and even bikes or cars. The country launched this scheme in 2024 to fight sluggish demand. It’s now being expanded.

Li Chao, spokesperson for the National Development and Reform Commission, said the money is already going out to support the Spring Festival and New Year holiday spending. Buyers get 15% back when they replace appliances like washing machines or smartphones, capped at 500 yuan per item.

If they trade in old cars, they can get 12% of the price of a new electric vehicle, up to 20,000 yuan. If they’re just upgrading to a newer clean vehicle, they still get 8%, maxing out at 15,000 yuan.

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