Court Records Offer Glimpse Into Trump’s CFPB Firing Efforts

This week, a judge will hear testimony that could determine the future of the CFPB.

The Consumer Financial Protection Bureau (CFPB) has been on shaky ground for months, with President Donald Trump’s administration pushing to cut 90% of its staff.

And as the New York Times reported Sunday (April 27), newly released court records shed some light into the decision-making behind the planned layoffs. Those records could play a key role this week as Judge Amy Berman Jackson reviews the firing plan.

Mark Paoletta, the CFPB’s chief legal officer and the architect of the firings, has defended the plan, saying the job cuts would “right-size” a department bogged down by “vast waste.” 

Russell Vought, the White House budget office director and the CFPB’s acting director, has called the regulator a “woke and weaponized” department.

However, the NYT report adds, the court records show that employees of the CFPB warned their bosses via email and chat that firing so many workers at the same time would ruin the agency’s ability to function.

Crucial technical systems would break down within days, the employees said, while attorneys would miss court deadlines and CFPB data that courts had wanted preserved would vanish.

“I don’t think we can keep operating even for 60 days without keeping many of these folks,” Christopher Chilbert, the bureau’s chief information officer, wrote in an email when the layoffs were announced.

Regardless of whether the Trump administration’s job cuts proceed, the CFPB has said it plans to drastically scale back its enforcement efforts related to financial services companies.

“The bureau will focus its enforcement and supervision resources on pressing threats to consumers, particularly service members and their families and veterans,” Paoletta wrote in a memo, per a recent Reuters report.

This month has also seen the House vote to repeal a CFPB rule governing consumer payment apps. The agency also announced it would no longer prioritize enforcing a rule requiring a registry of nonbank financial companies that have violated consumer laws and are subject to federal, state or local government or court orders.

But even in the face of these regulatory shifts, it’s important for FinTech companies to uphold robust compliance standards, QED Investors’ Amias Gerety told PYMNTS last month.

“Even as the compliance obligations may be lessened, that actually puts more pressure on you to be operating in good faith relative to your consumers,” Gerety said. “We’re telling people it’s a little bit easier on compliance, but harder on risk.”

The post Court Records Offer Glimpse Into Trump’s CFPB Firing Efforts appeared first on PYMNTS.com.