Banking and Finance Law Daily Wrap Up, CONSUMER FINANCIAL PROTECTION BUREAU—CFPB employee union calls for lawmakers to fully restore agency funding, (Mar 30, 2026)

By Jeff Williams

The union warned that funding cuts mean that the CFPB is at risk of shutting down “at any time.”

To “protect Americans from abuses in the debt settlement industry,” Congress must “immediately” restore funding to the Consumer Financial Protection Bureau, the union that represents CFPB employees has said in a letter to the leaders of the Senate Commerce, Science, and Transportation Committee and the House Energy and Commerce Committee.

The National Treasury Employees Union said that it shares the concerns the American Bankers Association (ABA), ACA International, America’s Credit Unions, American Financial Services Association, Consumer Bankers Association, National Bankers Association, and the Payments Leadership Council stated in a letter sent to House and Senate leaders regarding the debt settlement industry (see Banking and Finance Law Daily, Mar. 3, 2026). In that letter, the ABA and the other groups expressed particular concern with the industry’s “strategic default” model, which instructs consumers to stop making payments on their consumer debt and, instead, make monthly payments to an account operated by the debt settlement company to be used for negotiating settlements with a consumer’s creditors.

“CFPB workers remain ready to do the work Congress created the Bureau to perform: protecting consumers, ensuring fair competition in financial markets, and holding companies accountable when they break the law,” the union said. "We understand the harm that unsupervised debt settlement companies can cause both consumers and creditors. So, we support lenders trade groups’ call for bipartisan solutions to curbing predatory debt settlement practices.” Those efforts, the union said, "should start with Congress restoring CFPB funding back to twelve percent of the Federal Reserve’s budget.”

The concerns raised by the groups "are not surprising,” the union said, adding: “Over the past year, the Bureau’s debt settlement oversight work has been significantly curtailed as Acting Director Russ Vought has sidelined core agency functions and sought to illegally shut down the CFPB. And when the nation’s primary debt settlement industry watchdog is prevented from doing its job, bad actors inevitably take advantage of the gap.”

The union’s letter highlighted “notable actions” CFPB employees have taken to return money to “ripped-off consumers” and said that bureau staff have “have repeatedly uncovered deceptive marketing, unlawful fee structures, and practices that rip off those Americans who can least afford it.”

The union also warned that because of a 45 percent cut in CFPB funding implemented in the One Big Beautiful Bill last year, CFPB is “on track to run out of money and shut down by September.”

In a press release, union President Car Farman said that “Until Congress restores full funding, the CFPB is at risk of being bankrupted and shut down by Russell Vought at any time. With no CFPB to protect them, working families pay the price of predatory debt settlement practices."

Companies: ACA International; American Bankers Association; America’s Credit Unions; American Financial Services Association; Consumer Bankers Association; National Bankers Association; National Treasury Employees Union; Payments Leadership Council

LegislativeActivity: BankingOperations ConsumerCredit DebtCollection DirectorsOfficersEmployers Loans OversightInvestigations