The Consumer Financial Protection Bureau (CFPB) has taken the opposite approach: it goes where the money was taken—and gives it back to the people who were fleeced. This often includes seniors, members of the military, or lower paid government employees themselves.

That, apparently, is the problem.

The Trump administration has crippled the CFPB for over a year with spending freezes and cuts while saying the agency hurts banks by overregulating them. Twenty-one states responded in December with a lawsuit in order to block Trump from further gutting the CFPB. 

The full U.S. Court of Appeals for the DC Circuit will hearoral arguments this week in an appeal from the National Treasury Employees Union and other plaintiffs. The appellate judges will decide the fate of the agency.

This is not an abstract bureaucratic dispute. It has immediate, concrete consequences.

A new report by Sen. Elizabeth Warren’s (D-MA) office showed that Americans have lost nearly $19 billion since Trump took office again directly due to CFPB cuts

According to CFPB data, 22 pending enforcement actions against banks were dropped between January and October of last year, while only one new action was filed in all of 2025. Enforcement has not been “reformed”; it has been functionally switched off.
If this continues, the CFPB will soon be unable to protect consumers from predatory lending, abusive fees, and outright fraud. What replaces it is not a free market, but a patchwork of state laws and voluntary compliance, a system that historically costs consumers billions in excess fees, higher interest rates, reduced access to credit, and damaged credit scores—especially for those already struggling financially.

A less known aspect of the CFPB is the so-called “Small Dollar Rule,” which was designed to protect borrowers from abusive payday lending practices, particularly repeated attempts to debit bank accounts that trigger cascading fees. That goal is laudable. But the rule’s structure may have unintended consequences. By requiring borrowers to reauthorize any failed payment from their own bank account or debit card without the lender’s prompting proactively, it risks turning missed payments into silent defaults. For many low-income borrowers, life friction, not bad faith, prevents timely reauthorization. The result can be increased negative credit reporting and long-term credit damage for the very people the rule aims to protect. Good consumer protection policy like the Small Dollar Rule can backfire when it ignores real-world behavior.  

Shuttering the CFPB without fixing this broken ecosystem—and without demanding that banks provide lower-cost options or supporting alternatives like postal banking—only deepens Americans’ dependence on high-interest debt. It is consumer protection in reverse.

A massive win for consumers has been the reduction in bank NSF overdraft fees. Since the CFPB raised attention to the issue in 2022, banks and financial institutions agreed to refund more than $240 million to customers. This includes almost $177 million in unfair expected overdraft fees charged on transactions that were made when a customer had sufficient funds at the time of purchase in their account, along with nearly $64 million in duplicate NSF fees charged on the exact same transaction that already incurred a fee when it was previously declined the first time.

According to a Center for American Progress analysis, the five biggest issues consumers asked the CFPB for help with were: wrong information on a consumer’s credit report, improper use of a consumer’s credit or other personal report, a problem with a company’s investigation into an existing problem, a problem with a credit reporting company’s investigation into an existing problem, and attempts to collect debt not owed by the customer.Those numbers explain the hostility. When you make predatory behavior expensive, powerful predators complain.

The DC court cannot allow this White House to erase an agency that has returned tens of billions of dollars to Americans who were cheated, misled, or outright robbed. 

As it hopefully reclaims its authority, Congress also needs to explore credit alternatives—so consumers aren’t forced to keep paying ransom to the same institutions that insist regulation is the real problem.

After all, when the money keeps flowing out of ordinary Americans’ pockets and into bank coffers, it’s not hard to see who benefits when the watchdog goes away.

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