The Consumer Financial Protection Bureau is laying off nearly 90% of its workforce, a sweeping move by the Trump administration to curtail the agency's enforcement powers and reshape its mission, according to internal communications and court filings.
Approximately 1,500 employees will be dismissed, leaving around 200 staff members, according to a senior administration official who requested anonymity. Layoff notices were issued Thursday, with email and internal systems access set to be revoked by Friday evening. The mass downsizing affects core divisions, including enforcement and supervision.
The decision, which revives earlier efforts to shutter the post-crisis regulator entirely, follows a recent appeals court ruling granting the administration discretion to terminate "employees whom defendants have determined, after a particularized assessment, to be unnecessary."
The agency's employee union swiftly responded, filing an emergency motion Thursday night arguing the government had not complied with the court's requirement for individualized evaluations. "It is unfathomable that cutting the Bureau's staff by 90 percent in just 24 hours... would not interfere with the performance of its statutory duties," the union's motion stated.
Created in 2010 following the 2008 financial crisis, the CFPB was designed to protect consumers from financial abuses by nonbank institutions. Since its founding, it has delivered nearly $20 billion in relief through enforcement actions, according to agency records.
Mark Paoletta, CFPB's chief legal officer, informed staff Wednesday that the agency's revised mission will focus narrowly on mortgage-related issues. Oversight of digital payments, student loans, and medical debt-previous enforcement priorities-will be deprioritized or deferred to state regulators.
"To focus on tangible harms to consumers, the Bureau will shift resources away from enforcement and supervision that can be done by the States," Paoletta wrote.
The reorientation could benefit private efforts to expand in the fintech space. Elon Musk, a vocal critic of the agency and an adviser to President Trump's Department of Government Efficiency, has sought to integrate peer-to-peer payments into his platform X. He announced in January a partnership with Visa to facilitate such services.
Senator Elizabeth Warren (D., Mass.), who was instrumental in creating the CFPB, sharply criticized the move. This is "yet another assault on consumers and our democracy by this lawless administration, and we will fight back with everything we've got," she said in a statement Thursday.
The CFPB's restructuring follows a campaign promise by Trump to dismantle or significantly reduce the agency's role. Earlier this year, Trump and Musk floated eliminating the bureau outright, before settling on a dramatic reduction in scope and staffing. Trump has since nominated a new director for the agency, though the White House has not commented on the layoff notices.
According to one official dismissal letter reviewed by Reuters, employees will be removed effective in 60 days, but access to systems will be suspended immediately.
The workforce reduction has proceeded despite previous legal setbacks. A federal district judge had blocked the layoffs earlier this month, calling them a "hurried effort to dismantle and disable the agency." But last week's appellate ruling cleared the way for firings to resume under specific conditions.
