By Zo Terrana
Staff Writer
President Donald Trump in a recent initiative in reducing government size has now gone after the Consumer Financial Protection Bureau. Operations at the bureau were halted in early February, according to NBC Chicago, and a stream of legal concerns has followed the situation, which puts CFPB efforts to protect consumers in peril.
The CFPB was established after the Great Recession in 2008 to produce a lone agency responsible for enforcing consumer protection laws.
United States District Judge Amy Berman Jackson blocked the Trump administration's efforts in the firing of 1,500 out of 1,700 employees and overturned a “stop-work” order aimed at the bureau in March. CFPB staff members have stated that the employee cuts hinder the agency’s capability to supervise banks, maintain consumer complaint databases, and provide oversight of mortgage and credit fair lending laws, according to NBC Chicago.
According to NBC Chicago in a court file, Mark Paoletta, CFPB acting chief legal officer, stated that the agency should be trimmed down to about a 200 person staff which can "fulfill its statutory duties and better aligns with the new leadership's priorities and management philosophy."
As the Trump administration takes control, the U.S. bureau has dropped previously filed lawsuits. These lawsuits include improper debt collection practices directed by National Collegiate Student Loan Trusts targeting private student loan borrowers, as well as a lawsuit pertaining to Zelle fraud tied to Early Warning Services, JPMorgan Chase, Bank of America and Wells Fargo, according to NBC Chicago.
The agency also moved to enforce a requirement stating that non-bank firms offering financial services, like payments and wallet apps, must obey the same regulations. However, this requirement has been overturned by lawmakers, and Trump has stated that he will sign it.
Some payment apps will be supervised while others will evade the supervision, according to Adam Rust, the director of financial services for the Consumer Federation of America, according to NBC Chicago.
