Banking and Finance Law Daily Wrap Up, CONSUMER FINANCIAL PROTECTION BUREAU—CFPB staff reductions face criticism, (Apr 3, 2026)

By Steven Melendez

Employee union and advocacy groups slammed acting director Russell Vought’s plan to cut staffing at the regulator.

Plans by Consumer Financial Protection Bureau Acting Director Russell Vought to cut more than two-thirds of jobs at the regulatory agency faced criticism from a CFPB employee union, known as National Treasury Employees Union (NTEU) Chapter 335, and advocacy groups. The organizations argued making the cuts would leave Americans vulnerable to scams and abuse at a time of market turmoil and rising prices.

The CFPB filed a motion on Tuesday asking the D.C. Circuit Court of Appeals to modify an existing stay and allow him to cut the CFPB workforce to less than a third of its size at the start of the Trump administration, and remand the case to the district court level for further proceedings (see Banking and Finance Law Daily, Apr.1, 2026). The agency argued the proposed reduction plan undercuts the premise of an existing preliminary injunction—that agency leadership intend to effectively dismantle the CFPB, rather than restructure it while carrying out statutory obligations.

The move is also a response to the One Big Beautiful Act, which cut the CFPB’s funding cap from 12 percent of Federal Reserve operating expenses to 6.5 percent, according to the CFPB filings.

The NTEU said it intends to respond to the filing.

“This is Vought’s latest half-baked shutdown plan in his tiresome quest to destroy the CFPB via mass layoffs,” said Cat Farman, the CFPB union’s president. “Vought’s insistence that CFPB can meet its statutory obligations with only one-third of the staff is laughable, and an insult to the intelligence of the judges. Everyone knows Vought doesn’t want CFPB to exist at all.”

The union said the proposed cuts would leave fewer than 80 people at the CFPB’s Office of Supervision, eliminate offices required by the Dodd-Frank Act, including the Office of Community Affairs and the Office of Students and Young Consumers, and ignore veterans’ preference. The NTEU and other organizations sued the CFPB in February 2025 after Vought ordered some agency employees to stop working and began cutting the CFPB labor force.

Vought’s proposal also faced sharp criticism from Americans for Financial Reform, which said the cuts would “undermine the work of the CFPB” and “decimate its enforcement and supervision staff,” even amid “turmoil” in financial markets and continued issue with financial scams.

“When Acting Director Vought said his goal was to shut down the CFPB by early 2026, we need to take him at his word,” said Tom Feltner, associate director of consumer policy at Americans for Financial Reform. “This layoff plan retains some core functions, but, absent court review, there is nothing stopping CFPB leadership from firing the remaining staff down the line. Rather than cutting enforcement, supervision, and outreach staff, we should be strengthening the capacity of those offices to hold financial wrongdoers accountable, prevent emerging risks like those that caused the 2008 financial crisis, and prevent the wave of scams making everyone’s lives more difficult and more expensive.”

The group also criticized the proposed cuts for their potential effects on programs aiding older people, students, and service members.

The National Consumer Law Center (NCLC) also criticized Vought’s proposal, calling it part of a plan by the Trump administration to effectively close the CFPB.

“This latest attempt to eliminate essential staff at the CFPB would reduce the bureau to an empty shell, unable to fulfill the functions the CFPB is statutorily required to engage in,” said Chi Chi Wu, director of consumer reporting and data advocacy at NCLC. “People need a strong, independent CFPB that is staffed to address unscrupulous practices by credit reporting companies, Wall Street banks, and big corporations.”

The proposal would eliminate 80 percent of the agency’s enforcement staff, along with 85 percent of roles at the Division of Supervision, Wu warned.

“Cutting consumer protections during an affordability crisis, while people are holding record credit card and student loan debt and facing rising prices for gas, groceries, and utilities, is tone deaf and cruel,” said Wu. “The CFPB was created to protect people from financial fraud and abuse, but these continued cuts are opening the door to fraudsters and cheats.”

Companies: Americans for Financial Reform; National Consumer Law Center; National Treasury Employees Union

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