Labor & Employment Law Daily Wrap Up, SENATE NEWS—Warren leads 40 senators in pressing Trump administration on CFPB mass firings, (May 1, 2025)

By Justin Marcus Smith, J.D.

The lawmakers warned the CFPB cannot perform all of its congressionally-mandated functions with a staff of only 200 people; meanwhile, the GAO agreed it would investigate the dismantlement of the CFPB.

Senator Elizabeth Warren (D-Mass.), ranking member of the Senate Banking, Housing and Urban Affairs Committee, led 40 Democrat senators in sending an April 28 letter demanding that Consumer Financial Protection Bureau Acting Director Russell Vought account for how the CFPB will fulfill more than 80 congressionally-mandated functions after terminating about 90% of its staff. In recent weeks, Sens. Andy Kim (D-N.J.) and Elizabeth Warren (D-Mass.) separately called for independent CFPB and Government Accountability Office (GAO) investigations into what they described as the Trump administration’s campaign to “dismantle” the CFPB and undermine its consumer protection mission (see Banking and Finance Law Daily, Apr. 17, 2025). In a letter dated April 23, the GAO responded to Kim and Warren that it accepted their earlier discrete request for a GAO investigation.

Vought letter. The senators’ joint letter to Vought requested a detailed accounting of:

• each of the “more than 80 statutory obligations of the CFPB;”

• the number of employees assigned to each of those functions as of December 2024;

• the number of employees to be assigned to each function presently;

• the immediate impact of staff reductions on CFPB “ability to perform each function” consistent with the law and court orders; and

• copies of “any individualized or particularized analysis of those planned reductions on the agency’s work.”

The bulk of the senators’ joint letter expressed “grave concerns” about putative “illegal” actions that Vought is taking in his role at the CFPB. The letter specifically cited an alleged attempt, on April 17, to “fire nearly all of the agency’s remaining 1,700 employees” needed to carry out CFPB statutory duties.

The letter highlighted the apparent “gutting of entire divisions” including “departments created by Congress” for the protection of service members and older Americans. The senators contended the “rush to dismantle the CFPB” was being done “without any careful analysis” and in an “illegal” manner inasmuch as it defied a court order that prohibited Vought from shutting down the agency and interfering with its statutory responsibilities.

The letter reviewed how a bipartisan majority in Congress enacted law to create the CFPB in response to the 2008 financial crisis, and that the agency had succeeded in returning “over $21 billion to Americans cheated by giant companies.” The letter noted that Congress authorized the CFPB to be the “primary” federal regulator supervising and examining the largest financial institutions across the country for compliance with consumer financial protection laws.

The letter argued the putative plan to slash CFPB staff to just 16 employees would leave far too few people to process the nearly 3 million complaints it received in 2024, for example. The lawmakers said they expect there will be only one employee left to assist thousands of service members and their families, despite the fact that Congress specifically enacted that the CFPB Director “shall” establish an Office of Service Member Affairs to monitor service member consumer complaints, among other things. Service members are often on deployment and consequently may not be able, for example, to respond effectively to consumer account collection efforts brought against them.

Similarly, the senators cited how Congress mandated the CFPB to maintain an Office of Financial Protection for Older Americans. The letter cited that Americans over age 60 purportedly suffered $3.4 billion in fraud losses in 2023, whereas they said court filings suggest Vought has reduced the Older Americans office to just one position.

The senators also noted that the CFPB has “exclusive authority to supervise banks with more than $10 billion in assets” as well as “all nonbank lenders” to ensure federal consumer financial law compliance. They said that amounts to 180 banks and affiliates plus many nonbank lenders “that service more than 55% of the U.S. mortgage market.”

The letter noted the Chair of the Federal Reserve confirmed earlier this year that the CFPB is the only federal regulator presently examining giant banks for federal consumer financial law compliance. The senators continued that dismantling the office responsible for monitoring market developments “could crash our economy again.”

GAO announcement. Meanwhile, GAO Managing Director of Congressional Relations A. Nicole Clowers sent a response letter, addressed to Kim and Warren, stating that the GAO is accepting their letter request for a GAO investigation of the CFPB. A redacted public copy of the letter did not specify the name of the Managing Director, Financial Markets and Community assigned. The letter also suggested that staff might not be available presently, but it assured that “staff with the required skills will be available shortly to initiate an engagement.”

In recent weeks, Kim and Warren called for independent investigations. Their letter to GAO Comptroller Gene Dodaro asked the GAO to examine the impact of recent “stop work” orders, firings, contract cancellations, decisions to drop major lawsuits, and other related actions on CFPB consumer law enforcement. Their letter to the CFPB Office of Inspector General demanded a deep exploration of nearly 200 CFPB contracts abruptly canceled in February 2025 which effectively halted the CFPB’s Consumer Complaint Program. A third letter to the Acting Inspector General focused on workforce reductions and halted CFPB functions.

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