This article is from: srnnews.com

NEW YORK (AP) — The Trump administration has scaled back its plans to dismantle the Consumer Financial Protection Bureau, laying out a plan for an agency that would be significantly smaller than it was under President Joe Biden but still bigger than the one President Donald Trump envisioned right after he took office.

Under the new plan, the bureau’s headcount would be reduced from 1,700 authorized employees before Trump’s second term to roughly 550 staffers. The administration originally intended to shrink the bureau’s staff to around 200 employees.

The plan is opposed by the CFPB’s employee union and would likely require the approval of a federal judge. The new plan for the bureau was laid out in a memo and court documents this week in a lawsuit between the CFPB’s employee union and Russell Vought, Trump’s budget director and acting director of the CFPB.

The National Treasury Employees Union, which represents the bureau’s employees, said it is opposed to the staff reductions and would continue to oppose any changes to staffing levels.

“Vought’s insistence that CFPB can meet its statutory obligations with only one-third of the staff is laughable, and an insult to the intelligence of the judges. Everyone knows Vought doesn’t want CFPB to exist at all,” said Cat Farman, the CFPB’s union president.

The proposed job cuts were reported earlier by The New York Times.

While the union does oppose the staff reductions, the CFPB is facing a budgetary shortfall that the Trump administration argues requires the bureau to cut staff. Congress cut the CFPB’s operational budget by a little less than half in the One Big Beautiful Bill signed by Trump last year.

“It would be mathematically impossible to comply with the law without a workforce restructuring and reduction,” wrote Geoffrey Gradler, the bureau’s deputy director.

The proposed cuts at the CFPB would be broad-based if implemented. Roughly five out of six positions in the bureau’s supervision division, the part of the bureau that oversees bank’s compliance with federal banking and consumer protection laws, would be eliminated. Enforcement staff would drop by roughly four-fifths as well.

In President Trump’s second term, the CFPB has largely become inoperable. The bureau’s staff were told shortly after Trump was sworn into office that they should stop doing all work, and whatever work the CFPB has been doing has largely been directed at unwinding the work it did under President Biden and even the work it did in Trump’s first term in office.

The bureau was an early target of the Department of Government Efficiency, then run by Elon Musk, who posted on X that the CFPB should “RIP” shortly after DOGE employees became embedded at the agency. The administration then tried to lay off roughly 90% of the bureau’s staff, or roughly 1,500 employees, before a federal judge stepped in.

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