Funding Reductions Threaten the Future of America’s Consumer Watchdog

When Bianca Jones, a 33-year-old special education teacher in Memphis, Tennessee, decided a couple of years ago that she wanted to buy a house, she started digging into her Experian credit report. She was shocked by what she found.

Her student debt had been double-counted, making it look as though she owed a quarter of a million dollars, which put home ownership out of reach. Jones disputed the items with Experian, one of the major credit reporting agencies, multiple times in writing and over the phone, but got nowhere.

“They kept saying it’s been verified, it’s been verified… They never investigated. They never tried to remove it,” Jones said in an interview.

Eventually, Jones complained to the Consumer Financial Protection Bureau (CFPB), a federal watchdog created by Congress in 2010 to protect consumers in their financial dealings. This complaint helped her lawyers demonstrate to a judge the lengths she had gone to mitigate damage to her credit. That paper trail ultimately enabled Jones to successfully sue Experian to correct her record.

In January, Jones closed on a house purchase in the Memphis suburb of Millington for $300,000. “If I didn’t have this agency to go to, I don’t think I’d be in the house right now,” she said. “It actually changed my life.”

Experian and the CFPB did not respond to requests for comment on Jones’ case.

Agency Facing Shutdown

In interviews, consumers who had faced hardships, along with lawyers and credit counselors, expressed that the CFPB had been a lifeline for many. They feared that without it, consumers would be left vulnerable to financial predators.

Conceived by Senator Elizabeth Warren to oversee the type of lending that led to the 2008 financial crisis, the CFPB has long been a target of conservatives and industry critics. Established as part of post-crash reforms in 2010, it is the sole federal body primarily tasked with protecting consumers’ rights in the financial marketplace.

Currently, the CFPB faces potential extinction under President Donald Trump’s second administration, which claims the agency is a political weapon for Democrats and a burden on free enterprise.

Speaking to reporters at the White House in February, Trump stated it was “very important to get rid of the agency,” alleging that Warren had “used that as her little personal agency to go around and destroy people.”

Warren dismissed the criticism, asserting that the CFPB was fulfilling its role. “This is not about vendettas. This is about enforcing the law as it is written, so that billionaires and billionaire corporations don’t cheat American families,” she said.

White House Budget Director Russell Vought, a staunch CFPB critic, indicated plans to shutter the agency. The administration is currently fighting in court to reduce its workforce by up to 90%, while moving pending investigations to the Justice Department.

The CFPB has stated it is projected to run out of money in early 2026, and Vought claims he cannot legally seek more funding until the Federal Reserve returns to what the administration deems “profitability.” Congressional Republicans have also cut the CFPB’s maximum allowable funding.

As a result, the administration, congressional Republicans, and industry-backed lawsuits have dismantled a decade’s worth of CFPB regulations on issues like medical debt, student loans, and credit card fees.

Critics Complain of Overreach

Critics argue that the CFPB is redundant, with other federal and state regulators already overseeing consumer protection. They contend that its funding and leadership structure are unconstitutional. Unlike other banking regulators, the CFPB’s funding is not set annually by Congress and does not come directly from taxpayers.

Republicans have accused the CFPB’s first director, Richard Cordray, of using his powers to harm small banks and businesses through aggressive enforcement. Conservative groups have attempted to limit the agency’s powers through various legal challenges.

Thomas Hoenig, former vice chair of the FDIC, expressed skepticism about some of the CFPB’s past actions but acknowledged its importance. “If you take them out of the picture altogether, you’re going to get more abuse, not less,” he said.

‘Very Important for Me’

For many, the CFPB has been a crucial resource. Millions of Americans, like Jones, who struggle with credit reporting errors, predatory lenders, and other financial challenges, file complaints with the agency each year. This often prompts companies to address the issues, sometimes resulting in compensation for the complainants.

Morgan Smith, a 31-year-old single mother from Issaquah, Washington, turned to the CFPB after becoming a victim of identity theft. After her wallet was stolen, she discovered that someone had opened multiple accounts in her name. “I went straight to the CFPB and was able to find out how to deal with fraud and scams. It gave me all the information I needed to know… my rights,” she said.

Without the CFPB, borrowers would likely revert to a fragmented system of federal and state agencies that lack the CFPB’s resources and expertise. “Prior to the CFPB, we’d have to say, ‘write your attorney general, write to the FTC,’ and it became this sort of letter-writing campaign,” said Sam Hohman, who runs a nonprofit helping people with debt.

For individuals like Virginia resident Michael Johnson, the absence of the CFPB could mean fewer options in times of financial distress. After facing significant medical challenges, Johnson found himself in debt and received court summonses from creditors. Using the CFPB’s database, he learned about his rights and successfully navigated his situation.

“It adds credibility to your defense that you understand your rights,” Johnson noted. “Life happens to everybody.”

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When Bianca Jones, a 33-year-old special education teacher in Memphis, Tennessee, decided a couple of years ago that she wanted to buy a house, she started digging into her Experian credit report. She was shocked by what she found.

Her student debt had been double-counted, making it look as though she owed a quarter of a million dollars, which put home ownership out of reach. Jones disputed the items with Experian, one of the major credit reporting agencies, multiple times in writing and over the phone, but got nowhere.

“They kept saying it’s been verified, it’s been verified… They never investigated. They never tried to remove it,” Jones said in an interview.

Eventually, Jones complained to the Consumer Financial Protection Bureau (CFPB), a federal watchdog created by Congress in 2010 to protect consumers in their financial dealings. This complaint helped her lawyers demonstrate to a judge the lengths she had gone to mitigate damage to her credit. That paper trail ultimately enabled Jones to successfully sue Experian to correct her record.

In January, Jones closed on a house purchase in the Memphis suburb of Millington for $300,000. “If I didn’t have this agency to go to, I don’t think I’d be in the house right now,” she said. “It actually changed my life.”

Experian and the CFPB did not respond to requests for comment on Jones’ case.

Agency Facing Shutdown

In interviews, consumers who had faced hardships, along with lawyers and credit counselors, expressed that the CFPB had been a lifeline for many. They feared that without it, consumers would be left vulnerable to financial predators.

Conceived by Senator Elizabeth Warren to oversee the type of lending that led to the 2008 financial crisis, the CFPB has long been a target of conservatives and industry critics. Established as part of post-crash reforms in 2010, it is the sole federal body primarily tasked with protecting consumers’ rights in the financial marketplace.

Currently, the CFPB faces potential extinction under President Donald Trump’s second administration, which claims the agency is a political weapon for Democrats and a burden on free enterprise.

Speaking to reporters at the White House in February, Trump stated it was “very important to get rid of the agency,” alleging that Warren had “used that as her little personal agency to go around and destroy people.”

Warren dismissed the criticism, asserting that the CFPB was fulfilling its role. “This is not about vendettas. This is about enforcing the law as it is written, so that billionaires and billionaire corporations don’t cheat American families,” she said.

White House Budget Director Russell Vought, a staunch CFPB critic, indicated plans to shutter the agency. The administration is currently fighting in court to reduce its workforce by up to 90%, while moving pending investigations to the Justice Department.

The CFPB has stated it is projected to run out of money in early 2026, and Vought claims he cannot legally seek more funding until the Federal Reserve returns to what the administration deems “profitability.” Congressional Republicans have also cut the CFPB’s maximum allowable funding.

As a result, the administration, congressional Republicans, and industry-backed lawsuits have dismantled a decade’s worth of CFPB regulations on issues like medical debt, student loans, and credit card fees.

Critics Complain of Overreach

Critics argue that the CFPB is redundant, with other federal and state regulators already overseeing consumer protection. They contend that its funding and leadership structure are unconstitutional. Unlike other banking regulators, the CFPB’s funding is not set annually by Congress and does not come directly from taxpayers.

Republicans have accused the CFPB’s first director, Richard Cordray, of using his powers to harm small banks and businesses through aggressive enforcement. Conservative groups have attempted to limit the agency’s powers through various legal challenges.

Thomas Hoenig, former vice chair of the FDIC, expressed skepticism about some of the CFPB’s past actions but acknowledged its importance. “If you take them out of the picture altogether, you’re going to get more abuse, not less,” he said.

‘Very Important for Me’

For many, the CFPB has been a crucial resource. Millions of Americans, like Jones, who struggle with credit reporting errors, predatory lenders, and other financial challenges, file complaints with the agency each year. This often prompts companies to address the issues, sometimes resulting in compensation for the complainants.

Morgan Smith, a 31-year-old single mother from Issaquah, Washington, turned to the CFPB after becoming a victim of identity theft. After her wallet was stolen, she discovered that someone had opened multiple accounts in her name. “I went straight to the CFPB and was able to find out how to deal with fraud and scams. It gave me all the information I needed to know… my rights,” she said.

Without the CFPB, borrowers would likely revert to a fragmented system of federal and state agencies that lack the CFPB’s resources and expertise. “Prior to the CFPB, we’d have to say, ‘write your attorney general, write to the FTC,’ and it became this sort of letter-writing campaign,” said Sam Hohman, who runs a nonprofit helping people with debt.

For individuals like Virginia resident Michael Johnson, the absence of the CFPB could mean fewer options in times of financial distress. After facing significant medical challenges, Johnson found himself in debt and received court summonses from creditors. Using the CFPB’s database, he learned about his rights and successfully navigated his situation.

“It adds credibility to your defense that you understand your rights,” Johnson noted. “Life happens to everybody.”

Topics
Mergers & Acquisitions