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| URL | https://www.newyorker.com/magazine/2026/03/16/the-zombie-regulator |
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| Meta Title | Trumpâs Reckless Gutting of the Consumer Financial Protection Bureau | The New Yorker |
| Meta Description | As the cost of living continues to spiral upward, the Trump Administration is gutting the Consumer Financial Protection Bureau, the government agency built to protect Americans from fraud, scams, and financial ruin, E. Tammy Kim writes. |
| Meta Canonical | null |
| Boilerpipe Text | In the fall of 2019, Kashaye Traylor decided to buy a car. She was thirty years old, living in Rochester, New York, and raising a young son on her own. She worked full time at a nursing home and went to school in her off-hours, studying to earn a practical-nursing license. Her schedule was hectic, and often required her to cross town by bus, a time-sucking endeavor. âItâs hard to get around if you donât have a vehicle,â she told me. She saved up her hourly pay and eventually went to a Kia dealership, where she picked out a black 2013 Optima. The cash price was about eleven thousand dollars; the price Traylor was quoted, after factoring in a loan and finance chargesâat an annual percentage rate, or A.P.R., of 22.99 per centâwas twenty-four thousand. âI didnât even know what an A.P.R. was,â she told me. She put down sixteen hundred and agreed to pay three hundred and forty-three dollars per month for the next five and a half years.
Traylor signed a five-page contract created not by the dealership but by Credit Acceptance Corporation, a subprime auto lender, based in Southfield, Michigan, that partners with thousands of car lots across the country. On page 4, the dealership signed over its own interest in the car. âThe Seller has assigned this Contract to Credit Acceptance Corporation,â it stated. âThis assignment is without recourse.â Traylor didnât know it, but it was Credit Acceptance that had set the terms of the deal, using a proprietary algorithm. The algorithm didnât assess her particular financial situation; rather, it calculated how much the company would be able to recover if she didnât follow through with her payments. The lower the predicted recovery amount, the higher the price.
Credit Acceptance advertised its customer base as âcredit challenged Americansâ who deserve âtrust and respectââand, of course, loansââregardless of their credit history.â Yet its business model seemed to depend on those customersâ failure to pay. Sure enough, just a few months into the contract, Traylor started to fall behind, missing due dates and incurring late fees. One day, while she was parking, a vehicle rammed into her car. She wasnât injured, but the Optima was totalled and towed away. She received no insurance money, and Credit Acceptance kept billing her. âThe only thing I got in the mail was what I owed them,â she said. She stopped making payments altogether.
In September, 2022, Credit Acceptance sent Traylor a ânotice of acceleration,â informing her that she was in default for $15,234.66. (The companyâs letterhead included the tagline âWe change lives!â) The following year, it sued Traylor for that amount, plus interest. She retained Brian Goodwin, a housing and consumer-rights lawyer, who had represented many Credit Acceptance defendants. âIn my opinion, the company sets up these contracts knowing the borrowerâs going to fail,â Goodwin told me. It reminded him of the 2008 global financial crisisââ âGive everyone a mortgage. We donât care if they default. Weâre going to put it into a stock and make a boatload.â â In a court filing, he called Traylorâs contract âunconscionableâ and âusurious,â arguing that it violated a New York statute forbidding interest rates above sixteen per cent. (Credit Acceptance claims that it is covered by an exemption from the cap, because it offers âretail installment contracts,â not traditional loans.) Traylor initially won her case, then lost on appeal. The judgment added to other mounting debts: back rent, student loans. An app that she used for tracking her credit tabulated some forty thousand dollars owed. âPeople are trying to sue me for a car I donât even have,â she said.
Traylorâs experience with Credit Acceptance wasnât unusual. In fact, so many borrowers were delinquent on the companyâs loans that it had attracted the scrutiny of federal law enforcement. In 2023, the same year that Credit Acceptance sued Traylor, the company was itself sued, by the Consumer Financial Protection Bureau, or C.F.P.B.âan agency created in response to the 2008 crisis. The lawsuit, which New York State also joined, accused Credit Acceptance of making âpredatory loans to millions of financially vulnerable consumersâ and âsetting up consumers to fail.â Many of the loans, the suit went on, âexceed state usury caps.â (Credit Acceptance denies this characterization of its practices.) Individual states, including Mississippi and Massachusetts, had sued and obtained settlements with the company before, but only the C.F.P.B. has nationwide jurisdiction. Since 2011, the bureau has received more than twelve thousand complaints against Credit Acceptance.
The C.F.P.B.âs case was well under way when Donald Trump returned to the White House last year. But within a few months the bureau gave up that lawsuit and dozens of other enforcement actionsâagainst businesses ranging from Rocket Homes to Capital One to the rent-to-own lender Snap. Goodwin worried that the Administration was initiating a broader regulatory retreat. âI told my friends and family, I might need to change my job,â he said. âBecause consumer protection is going down.â
The federal building that once housed the C.F.P.B.âs headquarters is now mostly empty. Offices were hastily cleared of computers, paper files, family photos, and tchotchkes. A day-care center in the lobby, called Small Savers, remains open, but the children of C.F.P.B. workers have all but disappeared from its rolls. The parking garage has been transformed into a loading zone. Black S.U.V.s idle there, waiting to chauffeur members of the Trump Administration from the nearby White House complex.
In mid-December, a few dozen C.F.P.B. employees and supporters, wearing puffer coats and Santa hats, gathered for a protest on the brick sidewalk in front of the building. âHow do you spell corruption? E-L-O-N! How do you spell destruction? R-U-S-S!â they yelled, referring to Elon Musk and Russell Vought. Throughout the year, Musk and his so-called Department of Government Efficiency had subjected federal agencies to a combination of insults, shakeups, and random firings. Some two hundred and thirteen thousand civil servants have been let go or pushed to resign. Few agencies were hit as hard as the C.F.P.B., whose mission is to protect consumers and to insure that the markets for financial products âare fair, transparent, and competitive.â Vought, the director of the Office of Management and Budget, who had also been handed control of the C.F.P.B., essentially attempted to liquidate it. He seemed to regard it as an avatar of runaway liberal bureaucracy, a âwokeâ institution that targeted âdisfavored industries and individuals.â (âI donât know why he has such a hard-on for the bureau,â a former lawyer there told me.) Three weeks into the Trump Administration, Vought locked employees out of their offices and told them to âstand downâ from all work; he sent out hundreds of termination e-mails. Young men from
DOGE
, who hadnât been vetted for conflicts of interest, took over the computer systems, which included personal data from bank audits and confidential information on products being developed by tech firms.
Courts intervened, repeatedly, to block Vought from conducting mass firings without the approval of Congress. When he tried to shutter the agency by refusing to request funding for it, they blocked that, too. (The C.F.P.B. draws its budget from the Federal Reserve rather than from taxpayer appropriationsâa structure designed to safeguard its independence.) âRussell Vought illegally fired me twice,â Anne Romatowski, an artificial-intelligence expert who joined the bureau in 2022, said at the protest. She had received a breast-cancer diagnosis the same week that Vought started to lay off the staff. A preliminary injunction allowed her to maintain her health-care plan while she received radiation and chemotherapy.
On the campaign trail, Trump promised to lower grocery and gas prices, and he has inveighed against what he has called the âDemocrat inflation disaster.â Members of his party have demanded an end to bank bailouts, like those made after the 2008 crisis, and warned of an increasingly âfinancialized economyâ dominated by hedge funds and private equity. To the extent that affordability and fairness are a priority, âitâs really stupid to go after the C.F.P.B.,â Alexis Goldstein, a former crypto expert there, told me. The bureau was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the landmark bipartisan legislation intended to âpromote the financial stability of the United Statesâ in the wake of the Great Recession. It enforces more than twenty lawsâthe Fair Debt Collection Practices Act, the Truth in Lending Act, the Electronic Fund Transfer Act, the Home Mortgage Disclosure Act, the Military Lending Actâand has broad discretion to investigate âunfair, deceptive, or abusive acts and practices.â It has recovered twenty-one billion dollars in direct relief for consumers and five billion dollars in civil penalties from a wide range of companies. Millions of Americans have come to it for help; just by filing a complaint online, they have avoided home foreclosures and had student loans forgiven.
âRawk! You snowflakes arenât brave enough to debate me in the marketplace of ideas. Rawk!â
Cartoon by Ellie Black
These individual complaints guide the bureauâs systemic work. It has investigated Meta for extracting consumer data for targeted ads, capped credit-card late fees at eight dollars per month, and sued the online lender MoneyLion for overcharging members of the armed forces. It conducts prophylactic auditsâcalled supervisory examsâof the largest banks in the country and, crucially, of other financial firms, such as mortgage servicers, auto lenders, credit-card companies, medical-debt collectors, payday lenders, debt-repair outfits, and âfintechâ businesses that enable mobile banking, payments, and credit. The C.F.P.B. is the only federal entity with the power to supervise these ânon-banks.â
But now, under Voughtâs leadership, the C.F.P.B. has become a âzombie regulator,â Seth Frotman, its former general counsel, told me. (Vought declined my request for an interview.) The bureau has dropped at least forty lawsuits and other enforcement actions, valued at more than three billion dollars. It ceased supervising big banks and fintechs for compliance, and made it harder to file complaints against credit-reporting agencies. The timing of this pullback couldnât be worse. The Federal Reserve has warned that delinquencies on credit cards and auto loans have reached âlevels not observed since the Great Financial Crisis.â One in five student-loan borrowers is in default. Total consumer debt has hit a record of nearly nineteen trillion dollars; the median household is eighty thousand dollars underwater. The economy is âKâ-shaped, with the rich getting ever richer and the poor skidding down, mired in the feeling, if not yet the fact, of a recessionâwhat the economics writer Kyla Scanlon has termed a âvibecession.â Every day, there are reports of new crypto rackets and wire-transfer scams. âYou can step back from consumer financial regulation, and itâs not a problem until something blows upâand then thereâs a contagion,â Neale Mahoney, an economist at Stanford, told me. âWe wonât know the harm fully until itâs too late.â
From its founding, the C.F.P.B. tried to distinguish itself from other financial regulatorsâthe Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currencyâwhich labored behind the scenes to insure that banks remained solvent but which meant little to ordinary people. The bureau was set up by Senator Elizabeth Warren, a bankruptcy expert who was then on leave from Harvard Law School. Early meetings were held in the hallways of the Treasury Department, and then in a windowless room known as âthe cave.â The C.F.P.B. recruited big-firm lawyers, Silicon Valley coders, Ivy League economists, and hedge-fund alumni, many of whom had never held a government job. Jasmine Hardy joined in 2011, as an examiner in the supervision unit, and later became the vice-president of the employeesâ union. During the financial crisis, she had been a compliance officer at Morgan Stanley, and had watched Lehman Brothers employees lug boxes along Seventh Avenue after that firm collapsed. Some nine million Americans would lose their jobs, and there were nearly four million foreclosures. In her view, Dodd-Frank was a necessary response. âIâve had family and friends who consider themselves conservative who believe in the C.F.P.B. mission,â she told me.
Financial institutions werenât so sanguine. Banks and credit unions were accustomed to being examined for âsafety and soundnessâ (liquidity, in short), not for compliance with an array of consumer-rights laws. Non-banks hadnât been scrutinized much at all. The bureau met with C.E.O.s and consumer advocates, launched its complaint portal, and rushed to issue a string of mortgage rules on deadlines set by Dodd-Frank. In 2013, after it started to request information from banks and payday lenders for monitoring purposes, Senate Republicans called the C.F.P.B. âunaccountable and unrestrainedâ for collecting such âmassive data.â The following year, the bureau ordered Bank of America to refund more than seven hundred million dollars to credit-card users whoâd been sold deceptive add-on products. In 2016, it won a big case against Wells Fargo, whose employees had opened more than a million and a half unauthorized âghost accountsâ to meet sales quotas and collect bonuses, subjecting consumers to charges and fees. The bank agreed to pay full restitution, plus nearly two hundred million dollars in fines and penalties. Still, vilification of the bureau continued. The
Wall Street Journal
accused Richard Cordray, whom Barack Obama had appointed as the agencyâs inaugural director, of causing âsignificant economic harmâ by suggesting that payday lenders, which offer high-interest short-term loans, should have to assess whether customers can actually pay them back. (A lobbying group for the industry filed a lawsuit claiming that the bureau was unconstitutional, but lost at the Supreme Court.)
When President Trump first took office, in 2017, his interim pick to run the C.F.P.B. was Mick Mulvaney, who, like Vought, froze the bureauâs work and requested zero dollars for its budget. Somewhat surprisingly, his Senate-confirmed successor, Kathy Kraninger, appeared interested in actually doing the job. Under her watch, the bureau filed lawsuits against the credit-reporting company Equifax, the loan servicer Navient, and the for-profit-college chain ITT Tech. But it didnât go after big banks or emerging firms, focussing instead on enforcing mortgage rules and pushing financial literacy for consumers. This restrained approach drew criticism during the pandemic, when high unemployment and a flood of stimulus money collided with a profusion of fintech products that made Americans vulnerable to fraud. (Kraninger declined to comment.)
By comparison, Joe Bidenâs nominee to lead the bureau, Rohit Chopra, was bristly and ambitious. He had been with the C.F.P.B. at the beginning, as the student-loan ombudsman, after working for two years as a consultant for McKinsey & Company. âI had a very negative opinion of government and regulators,â he told me late last year, at a coffee shop in Harlem. âI often feel that the status quo has failed us.â He was known as an impatient crusader. One of his advisers described him as the kind of person who at a bachelor party would âhelp the strippers refinance their student loans.â
Chopra left the bureau in 2015. Three years later, he was appointed to the Federal Trade Commission, which, he said, was âessentially in a coma.â Trump was in his first term, and Chopra felt that lackadaisical regulators had set the table for the politics of grievance and resentment that carried him to victory. âThey watched while the opioid crisis raged. They allowed the for-profit college crisis to completely take over. They watched when subprime mortgages happened,â he told me. At the F.T.C., Chopra was alert to the growth of the tech industry; the commission pursued enforcement actions against Amazon, Zoom, NTT Global Data Centers, and Facebook. In the fall of 2021, when he returned to lead the C.F.P.B., it, too, was âa totally moribund agency,â he said. There was âalmost nothing being doneâ to monitor the widespread adoption of fintech apps or âthe entry of the big tech companies into payments and banking.â
Chopra increased the enforcement team by fifty per cent and created a technologistsâ office to advise staff on advances in A.I., digital wallets, and crypto. The bureau took steps to insure that the algorithms used to estimate home values were accurate and fair. It ordered Google, Apple, Facebook, Amazon, Square, and PayPal to âturn over information about their products, plans and practices when it comes to payments.â It issued legal guidance on âbuy now, pay laterâ apps, such as Klarna, PayPal, and Affirm, which allow consumers to purchase anything, from a sweater to groceries to rent, in installments. (According to a recent survey, fifty-five per cent of Americans have done so.) Though early data showed that consumers were following through with their payments, there was a danger that they would engage in âstacking,â or using multiple apps at once, with virtually no guardrails or paper trail, and get unwittingly saddled with fees and interest. The C.F.P.B. also outlined requirements for âearned-wage-accessâ companies, such as Dave and Chime, which give employees an advance on their paychecks. In 2022, the bureau found that more than seven million workers had taken out twenty-two billion dollars in earned-wage accessâup ninety per cent from the previous year. These kinds of fintech products werenât enumerated in Dodd-Frank; they hadnât really existed in 2010. But as Nick Hand, an astrophysicist by training and a former bureau technologist, told me, âThe C.F.P.B. is responsible for banks, lenders, and paymentsâand big tech companies have been creeping into that scope.â
Those companies, and their backers, disagreed. âI do think Chopra went overboard,â James Kim, a partner at the corporate-law firm Cooley and a C.F.P.B. enforcement lawyer during the Cordray years, told me. âThere was a lot of guidance and statements and warnings and pronouncements and interpretive rules. He threw a lot of garbage at the wall at the end.â Marc Andreessen, the prominent venture capitalist, went on Joe Roganâs podcast to complain that the bureau had âterrorized financial institutionsâ and that it wanted to âprevent fintech, prevent new competition, new startups that want to compete with the big banks.â In January, 2025, Mark Zuckerberg, the C.E.O. of Meta, told Rogan that the C.F.P.B. seemed to have an âunderlying political motivationâ for probing his companyâs advertising practices. âWeâre not a bank. What does Meta have to do with this?â Zuckerberg said. Trump fired Chopra a few weeks later and installed Vought as acting director.
Last February, as Vought and
DOGE
began their work, the union representing the C.F.P.B. employees, along with the National Consumer Law Center and the N.A.A.C.P., tried to forestall the destruction. They retained the law firm Gupta Wessler, whose partner Deepak Gupta is a well-known Supreme Court litigator and a former bureau employee. He had started his career at Public Citizen, the advocacy group founded by Ralph Nader, the godfather of the consumer-rights movement. âWhen I was thinking about going to law school, I thought civil rights and civil liberties are the ways that lawyers change the world,â Gupta told me. âBut itâs actually these kinds of problemsâproblems of economic justice, problems of consumer protection and also workersâ rightsâthat are really where the lawâs effects are felt most in peopleâs daily lives.â Gupta keeps pictures of himself with Nader and Warren above his desk.
At a series of emergency court hearings, Guptaâs team presented evidence that Vought had begun an illegal campaign to kill the C.F.P.B. He had cancelled office leases and outside contracts, and even deleted the bureauâs home page. He made plans to fire the vast majority of the bureauâs employees, and advertised a new âTip Lineâ on X: âAre you being pursued by CFPB enforcement or supervision staff, in violation of Acting Director Russ Voughtâs stand down order? If so, DM us or send an email.â
A federal judge in Washington, D.C., granted a preliminary injunction, ordering the bureau to retain employees and perform the obligations laid out under Dodd-Frank. The agency appealed the case, which is ongoing. (At a three-hour oral argument last month, an attorney for the Trump Administration argued that the bureau would technically still exist even if the entire staff was eliminated.) Vought complied with the prohibition against layoffs but didnât let employees do much beyond what his deputy, Adam Martinez, referred to as âcloseout duties.â Workers reluctantly dropped lawsuits and settlements, scrubbed educational materials from the internet, and reversed regulations and interpretive rules. No new companies were examined or investigated. (âWeâve been insanely busy since we took over the agency a year ago,â a C.F.P.B. spokesperson wrote, in an e-mail, contesting this account. âIf you were to pay attention to our reports, court cases, etc you would know that.â) Six months into Voughtâs tenure, Hardy, the examiner, told me, âIâve been given one assignment, and that was to
close
a supervisory action.â Like other federal employees, she was required to list five accomplishments in a weekly e-mail. âIâd just copy and paste: âI did not violate Director Voughtâs stop-work order,â â she said. In July, she met with her manager for a midterm review, but there was nothing to review. The C.F.P.B. has paid hundreds of millions of dollars to employees who arenât allowed to do their jobs. Democrats on the Senate Banking Committee estimate that the bureauâs idleness has cost consumers nearly twenty billion dollars. Trumpâs Council of Economic Advisers countered with a paper stating that the C.F.P.B. had âincreased consumer borrowing costsâ by several hundred billion dollars between 2011 and 2024.
Meanwhile, Vought took five million dollars from the bureauâs budget to pay for his personal security and, in October, bragged on âThe Charlie Kirk Showâ that he would finish closing down the agency âprobably within the next two to three months,â notwithstanding the injunction. Vought repeated Andreessenâs talking points, claiming that the C.F.P.B. âhad the DNA of Elizabeth Warrenâ and wanted to âweaponize the tools of financial laws against basically small mom-and-pop lenders,â despite its historic focus on the largest firms in the country. Last April, in a policy memo laying out âsupervision and enforcement priorities,â Mark Paoletta, the bureauâs chief legal officer, promised to cut examinations by half, go easy on non-banks, and investigate unfair lending only when thereâs already been âproven actual intentional racial discriminationââas though a queue of professed culprits were simply waiting to be handcuffed. The bureau would no longer focus on student loans, medical debt, âinitiatives for âjustice involvedâ individuals (criminals),â or, in a gift to the tech industry, digital payments and âpeer-to-peer platforms and lending.â
Contradictions soon emerged. The policy memo included a promise to focus on âservice members and their families, and veterans.â Yet in early July the bureau withdrew from a consent order that would have returned ninety-five million dollars in surprise overdraft fees to the military customers of Navy Federal Credit Union. (According to the bureau spokesperson, Navy Federal was a âvictim of Chopraâs abuse of power.â) The memo also expressed an intent to step away from potentially âduplicativeâ workâto let states and cities enforce their own consumer-finance laws, a traditionally Republican position. The bureau flipped its stance on that, too. In 2024, the C.F.P.B. had proposed a rule to remove medical debt from credit reports, based on years of research that revealed dodgy practices. Debt collectors often pursued the wrong patients, for example, and tried to recover balances that were more than a decade old. And, because medical debt isnât incurred in the same volitional manner as, say, a Nordstrom credit-card balance, the bureau found it âless predictive of future repayment.â This past spring, Voughtâs C.F.P.B. abandoned the rule. Then, in October, the bureau went further and issued a kind of anti-rule arguing that states may not pass their own laws on credit reporting. Several states had already done so. Iâd seen the impact myself, when I received a doctorâs bill advising me of new âprotections around medical debtâ in New York that banned its use for credit reporting, liens, and wage garnishment. Voughtâs anti-rule, though not binding, cast doubt on the future of such laws.
I recently visited the office of Tzedek DC, a legal-aid nonprofit in Washington, D.C. The organization had been advocating for a local bill to remove medical debt from credit reports, in line with the old federal rule, and was now struggling to respond to the âone-hundred-and-eighty degree change,â as one employee put it. Advocates were referring to the current bureau as âthe evil C.F.P.B.â Two weeks later, during a public hearing on the legislation, a D.C. councilwoman named Christina Henderson acknowledged that the uncertainty could complicate the billâs future. âFrankly, the C.F.P.B. could not exist in, like, a week,â she said.
A similar question mark hovered over new financial tech. Chopraâs bureau had framed âbuy now, pay laterâ products as credit cards, and earned-wage-access products as payday lenders. These categorizations would mean that, for instance, âbuy now, pay laterâ companies would have to investigate disputes, issue refunds, and provide billing statements. Voughtâs C.F.P.B. reversed those interpretations, leaving the states, and consumers, to figure out what rules there were, if any. âThe different âbuy now, pay laterâ platforms have different policies on what happens when you miss a payment or whether itâs reported to a credit bureau,â Kimberly Palmer, a writer at the personal-finance site NerdWallet, told me. âThatâs why itâs important to dig into the disclosures. But itâs hard to do that, because youâre opting in at checkoutâyouâre in a time-pressure situation.â
Conflicting bills on earned-wage access are pending in nearly half the states. Though these products usually advertise themselves as free and interest-free, they often charge hefty fees. Earlier this year, in New York, lawmakers introduced the Stop Taking Our Pay Act, which would define wage advances as loans subject to the stateâs usury statutes. âThese Big Tech finance apps are finding ways and loopholes,â Steven Raga, a state assemblyman, said. A consumer speaking in support of the bill likened the use of earned-wage-access apps to visiting a payday lender or a pawnshop, but âfrom the comfort of my own bed.â The Financial Technology Association, an industry group, is lobbying for a âfederal regulatory frameworkâ that would classify earned-wage access as something other than credit or a loan. Penny Lee, the groupâs president, told me that it simply wants to âhave rules on the books that treat different products differently.â In the meantime, New Yorkâs attorney general is suing the popular earned-wage-access app DailyPay for charging fees that can add up to an A.P.R. of between two hundred and seven hundred and fifty per cent. DailyPay denies that it is making loans at all, and has moved to dismiss the case.
The spectre of freewheeling fintech has unnerved a lot of C.F.P.B. alumni, but none have been as vocal as Frotman, the former general counsel. Post-Biden, Frotman has been a touring Cassandra. âEvery bank wants to be a tech company, and every tech company wants to be a bank,â he often says. I met him in September, at the law school of the University of California, Berkeley. A lecture hall full of aspiring lawyers had been lured by free burritos to listen to him and Sam Levine, a former director of consumer protection at the F.T.C. (Levine would soon take a job with Mayor Zohran Mamdani, leading the New York City Department of Consumer and Worker Protection.) The law student moderating the event was a former C.F.P.B. analyst who wore a âDodd-Frank is pretty greatâ T-shirt under her blazer. Frotman spoke with agitated speed. He compared the current glut of delinquenciesâand lack of oversightâto the conditions that produced the 2008 financial crisis. Back then, the risk was caused by bundled derivatives backed by crappy mortgages. Now, he said, âa whole new asset class of fintech-driven installment productsâ was making it shockingly easy to accumulate debt. âYour income isnât high enough, so weâre going to have your employer give you a payday loan, but just call it earned-wage access. On top of that, you donât have enough money to pay for groceries, so weâll just put it on âbuy now, pay later.â Then you go to the doctor and you canât pay for your kidsâ medicines, so you put it on a deferred-interest credit card. The list just goes on and on.â
Under Biden, the bureau had tried to prevent companies from invoking innovation to escape oversight. It filed lawsuits and proposed rules governing Meta, Google, Amazon, Apple, Square, SoLo Funds, Venmo, PayPal (which recently applied for a bank charter), Zelle (and its owners, Bank of America, JPMorgan Chase, and Wells Fargo), Credova Financial, Cash App, and Walmartâs fintech partner, Branch Messenger. Nearly all of those efforts are now dead. The C.F.P.B.âs inaction, an official warned in federal court, is likely âplanting the seeds for a white-collar financial-crime spree.â
The supervisory exam is one of the quieter, but most effective, tools that the C.F.P.B. has. Every year, the bureau decides on a list of businesses and products that could use a checkup. There might have been a rise in credit scams targeting immigrants and elders, a spate of home foreclosures clustered in the Southwest, or a spike in interest rates on dental credit cards. The companies involved are given two monthsâ notice before a team of examiners inspects call logs, customer records, internal policies, application forms, advertisements, and retail practices. The public doesnât know whoâs being examined, and everything is confidential. Exams sometimes reveal errors or oversights that can be addressed much more cheaply and discreetly than through litigation. A discriminatory algorithm might be reprogrammed; a bank could waive fines or distribute reimbursements. âThere are a lot of consumers who would later get a check, and they didnât know why,â Lorelei Salas, the head of supervision during the Biden Administration, told me. In 2023, for example, exams resulted in refunds of âjunk feesââcharges for paper statements that never arrived, add-on auto insurance that was still billed after a vehicle was repossessedâtotalling a hundred and forty million dollars.
In late January, Victoria Dorfman, a lawyer who, like Vought, was balancing multiple jobs in the Trump Administration, spoke at a virtual meeting of the C.F.P.B.âs supervision unit. During the past year, Dorfman had served as a top lawyer at the Office of Management and Budget, and nominally managed the C.F.P.B.âs enforcement and supervision units. She had previously been a partner at the law firm Jones Day and a clerk for Justice Clarence Thomas. The last time sheâd addressed the examiners had been in November, at a meeting to discuss a new âhumility in supervisions pledge.â At the start of every exam, staff would be required to read the pledge aloud, promising âto work collaborativelyâ with the entity being inspected. Now, on the video call, she emphasized that deference was a guiding principle. âAn examination is not a fishing expedition,â she said. Future exams, she insisted, would be virtual and short.
âDo you want to be friends? The kind where youâre always the one who has to reach out?â
Cartoon by Jon Adams
The supervision unit had shrunk by thirty per cent. An examiner who was still there told me that he found the call âcondescendingâ and âinfuriating.â The examiner is a veteran, and Dorfmanâs tone reminded him of being dressed down in the military. âI was raging the whole time,â he said. âIt killed the moraleââor whatever was left of it. In 2016 and 2024, the examiner had voted for Trump, angered by the Democratsâ sidelining of Bernie Sanders and drawn to the
MAGA
promise ânot to go to war,â he told me. (In 2020, he voted for the Libertarian candidate, Jo Jorgensen.) But Trumpâs real priorities were becoming clear. âTheyâre cutting taxes for the rich and getting rid of our benefits,â he said. He noted that, though brick-and-mortar banks already have a lot of compliance infrastructure in place, non-banks do not. âAll these tech people are friends with Trump,â the examiner told me. âThey all went on Joe Rogan and started tweeting about the C.F.P.B. at the same time, and now theyâre getting around regulations for their payment platforms.â Trumpâs attitude toward the big banks has been less generous. He is suing JPMorgan Chase (and its chairman and C.E.O., Jamie Dimon) for five billion dollars, alleging that he had been âdebankedâ after January 6th because of his politics.
The examiner tried to maintain some semblance of a routine. He checked his work e-mail and did the occasional follow-up on an old exam. Sometimes he met nearby colleagues for a drink. He cooked and lifted weights and hung out with his fiancĂ©e and their cat. He wrote autofiction and applied for jobs, though there werenât many available: examiners arenât in high demand these days, in the public or the private sector.
This year, Dorfman has proposed sixty-eight examsâless than half the usual number. The list tracks the bureauâs new priorities. There are no fintechs on it, and very few exams pertaining to discrimination in lending. None of the top mortgage lenders is scheduled, âwhich is crazy from a risk perspective,â the examiner said. He worried that the shift to brief, online examsâif the exams happened at allâwould make the process less effective. âYou donât get to see the big picture,â he explained. âYou miss a lot of trends and patterns.â
Another examiner I spoke to had similar concerns. She worried most about non-banks. Over lunch at a pizza restaurant, she recalled doing an exam of a payday-lending franchise in Tennessee. âWe were interviewing the guy who worked there and heard a bunch of rattling in the ceiling,â she said. âI was, like, âOh, is that your A.C. system?â Heâs, like, âItâs rats. Iâve told management about them.â If they didnât care about their employees, that was a sign that theyâre not gonna give a fuck about the customer.â She showed me a stack of old manuals from examiner trainings: âFundamentals of Mortgage Origination 2,â âKnow Before You Owe.â Inside were sample math problems and worksheets that reminded me of high-school calculus. After trying to wait out the tumult at the bureau, this examiner had finally left for a job at a national bank. She observed that the compliance department there was âaware that the C.F.P.B. is kind of moot right now.â The bank wasnât being reckless, but it didnât feel the need to invest in more monitoring, either. She missed her work at the bureau. âThat was my purpose,â she said. âThatâs how I did good in this world.â
Of the seventeen hundred employees who were with the C.F.P.B. in late 2024, about twelve hundred remain. For some, the paycheck is simply hard to beat. (The pay scale of the Federal Reserve System, which includes the bureau, is higher than that of most of the rest of the federal government.) But many workers are still there out of a sense of duty. âIn the trajectory of the country, I know my role is limited,â a senior lawyer at the bureau told me. âBut if people in the eighteen-nineties, when people were striking in mines to prevent being crushed, if they could take bullets to hold the line, then I can desk-jockey this white-collar line from my home office.â
One night in December, I joined a group of employees for dinner at the Washington home of Doug Wilson, a C.F.P.B. enforcement attorney I know from law school. I was the first to arrive and was greeted at the door by two cats and an anxious, big-eyed dog named Jolene. A banner from a recent union protest was rolled up and lying across a couch on the porch. Wilson took me upstairs to his office, which was piled with notes and pleadings. A bound copy of Title X of Dodd-Frank, the section of the statute establishing the C.F.P.B., was on the floor next to his desk.
Wilsonâs guests included litigators, a technologist, and a policy expert. One man described his work as increasingly âperformative.â Heâd recently had to settle a big case on the cheap, and the final agreement undermined âthe whole point of the statute,â he said. He and his colleagues were starting to look for other work. âI donât think anyone thinks the bureau has a master plan,â Wilson told me. If the situation became totally untenable, he would hang a shingle, perhaps starting a solo practice that could âpitch potential enforcement actions to state A.G.s,â he said. (Twenty-one states and the District of Columbia have sued Vought to keep the bureau intact.) Other C.F.P.B. alumni had already taken jobs with state governments, banking regulators, city enforcers, fintechs, and consulting firms. A former bureau lawyer at the New York attorney generalâs office described a burgeoning âC.F.P.B. diaspora.â Wilsonâs former boss, Eric Halperin, was re-creating a version of the bureauâs enforcement division at Protect Borrowers, a consumer-rights nonprofit. Still, Halperin told me, ânothing can take the place of what the bureau, with all its different tools, was able to do.â
The next day, Wilson and other members of the enforcement team gathered for the unitâs annual holiday party, held in the community room of a colleagueâs apartment building. On the way, they received an e-mail from Michael Salemi, the acting enforcement director:
I have served under every Bureau Director or Acting Director since I started at the Bureau in August 2011. Even if I disagreed with a Directorâs policy direction, I did my best to execute on that direction. I hope that everything I have done at the Bureau has been animated by the Bureauâs statutory objectives, including ensuring that consumers are protected from unfair, deceptive, or abusive acts and practices and from discrimination.
I had hoped to spend the rest of my career advancing that mission at the Bureau. I still hope I can continue that mission, but Iâm disappointed that it wonât be here.
Salemi was the third enforcement director to resign in less than a year. âHe was an incredibly even-tempered person,â Wilson told me. âSo for him to finally find it unsustainable to stay was a real kick in the teeth.â About half of the seventy-five people at the party had already quit. Some flew in from the West Coast, hungry for an opportunity to commiserate. There were Greek kebabs, spiked cranberry punch, wine, beer, and a lot of dark humor. Afterward, the party decamped to Wok and Roll, a karaoke bar. Wilsonâs phone lit up with a link to a
Bloomberg Law
article, in which a C.F.P.B. spokesperson said, of Salemiâs resignation, âNo longer is the Enforcement Division one of thuggery and unprofessional behavior.â And: âDonât let the door hit you on the way out.â
At the bar, Wilson chose a song called âThe Modern Leper,â by the Scottish indie-rock band Frightened Rabbit. The chorus goes like this:
Is that you in front of me
Coming back for even more of exactly the same
You must be a masochist
To love a modern leper on his last leg
It was a bit of a âvibe killer,â Wilson admitted. The next morning, he went back to work for more of the same. ⊠|
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[Letter from Washington](https://www.newyorker.com/magazine/letter-from-washington)
# The Zombie Regulator
As the cost of living continues to spiral upward, the Trump Administration is gutting the government agency built to protect Americans from financial ruin.
By [E. Tammy Kim](https://www.newyorker.com/contributors/e-tammy-kim)
March 9, 2026
The C.F.P.B. is meant to protect working people. Why does Trump want it gone?Illustration by Till Lauer
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Save this story
In the fall of 2019, Kashaye Traylor decided to buy a car. She was thirty years old, living in Rochester, New York, and raising a young son on her own. She worked full time at a nursing home and went to school in her off-hours, studying to earn a practical-nursing license. Her schedule was hectic, and often required her to cross town by bus, a time-sucking endeavor. âItâs hard to get around if you donât have a vehicle,â she told me. She saved up her hourly pay and eventually went to a Kia dealership, where she picked out a black 2013 Optima. The cash price was about eleven thousand dollars; the price Traylor was quoted, after factoring in a loan and finance chargesâat an annual percentage rate, or A.P.R., of 22.99 per centâwas twenty-four thousand. âI didnât even know what an A.P.R. was,â she told me. She put down sixteen hundred and agreed to pay three hundred and forty-three dollars per month for the next five and a half years.
Traylor signed a five-page contract created not by the dealership but by Credit Acceptance Corporation, a subprime auto lender, based in Southfield, Michigan, that partners with thousands of car lots across the country. On page 4, the dealership signed over its own interest in the car. âThe Seller has assigned this Contract to Credit Acceptance Corporation,â it stated. âThis assignment is without recourse.â Traylor didnât know it, but it was Credit Acceptance that had set the terms of the deal, using a proprietary algorithm. The algorithm didnât assess her particular financial situation; rather, it calculated how much the company would be able to recover if she didnât follow through with her payments. The lower the predicted recovery amount, the higher the price.
Credit Acceptance advertised its customer base as âcredit challenged Americansâ who deserve âtrust and respectââand, of course, loansââregardless of their credit history.â Yet its business model seemed to depend on those customersâ failure to pay. Sure enough, just a few months into the contract, Traylor started to fall behind, missing due dates and incurring late fees. One day, while she was parking, a vehicle rammed into her car. She wasnât injured, but the Optima was totalled and towed away. She received no insurance money, and Credit Acceptance kept billing her. âThe only thing I got in the mail was what I owed them,â she said. She stopped making payments altogether.
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In September, 2022, Credit Acceptance sent Traylor a ânotice of acceleration,â informing her that she was in default for \$15,234.66. (The companyâs letterhead included the tagline âWe change lives!â) The following year, it sued Traylor for that amount, plus interest. She retained Brian Goodwin, a housing and consumer-rights lawyer, who had represented many Credit Acceptance defendants. âIn my opinion, the company sets up these contracts knowing the borrowerâs going to fail,â Goodwin told me. It reminded him of the 2008 global financial crisisââ âGive everyone a mortgage. We donât care if they default. Weâre going to put it into a stock and make a boatload.â â In a court filing, he called Traylorâs contract âunconscionableâ and âusurious,â arguing that it violated a New York statute forbidding interest rates above sixteen per cent. (Credit Acceptance claims that it is covered by an exemption from the cap, because it offers âretail installment contracts,â not traditional loans.) Traylor initially won her case, then lost on appeal. The judgment added to other mounting debts: back rent, student loans. An app that she used for tracking her credit tabulated some forty thousand dollars owed. âPeople are trying to sue me for a car I donât even have,â she said.
Traylorâs experience with Credit Acceptance wasnât unusual. In fact, so many borrowers were delinquent on the companyâs loans that it had attracted the scrutiny of federal law enforcement. In 2023, the same year that Credit Acceptance sued Traylor, the company was itself sued, by the Consumer Financial Protection Bureau, or C.F.P.B.âan agency created in response to the 2008 crisis. The lawsuit, which New York State also joined, accused Credit Acceptance of making âpredatory loans to millions of financially vulnerable consumersâ and âsetting up consumers to fail.â Many of the loans, the suit went on, âexceed state usury caps.â (Credit Acceptance denies this characterization of its practices.) Individual states, including Mississippi and Massachusetts, had sued and obtained settlements with the company before, but only the C.F.P.B. has nationwide jurisdiction. Since 2011, the bureau has received more than twelve thousand complaints against Credit Acceptance.
The C.F.P.B.âs case was well under way when Donald Trump returned to the White House last year. But within a few months the bureau gave up that lawsuit and dozens of other enforcement actionsâagainst businesses ranging from Rocket Homes to Capital One to the rent-to-own lender Snap. Goodwin worried that the Administration was initiating a broader regulatory retreat. âI told my friends and family, I might need to change my job,â he said. âBecause consumer protection is going down.â
The federal building that once housed the C.F.P.B.âs headquarters is now mostly empty. Offices were hastily cleared of computers, paper files, family photos, and tchotchkes. A day-care center in the lobby, called Small Savers, remains open, but the children of C.F.P.B. workers have all but disappeared from its rolls. The parking garage has been transformed into a loading zone. Black S.U.V.s idle there, waiting to chauffeur members of the Trump Administration from the nearby White House complex.
In mid-December, a few dozen C.F.P.B. employees and supporters, wearing puffer coats and Santa hats, gathered for a protest on the brick sidewalk in front of the building. âHow do you spell corruption? E-L-O-N! How do you spell destruction? R-U-S-S!â they yelled, referring to Elon Musk and Russell Vought. Throughout the year, Musk and his so-called Department of Government Efficiency had subjected federal agencies to a combination of insults, shakeups, and random firings. Some two hundred and thirteen thousand civil servants have been let go or pushed to resign. Few agencies were hit as hard as the C.F.P.B., whose mission is to protect consumers and to insure that the markets for financial products âare fair, transparent, and competitive.â Vought, the director of the Office of Management and Budget, who had also been handed control of the C.F.P.B., essentially attempted to liquidate it. He seemed to regard it as an avatar of runaway liberal bureaucracy, a âwokeâ institution that targeted âdisfavored industries and individuals.â (âI donât know why he has such a hard-on for the bureau,â a former lawyer there told me.) Three weeks into the Trump Administration, Vought locked employees out of their offices and told them to âstand downâ from all work; he sent out hundreds of termination e-mails. Young men from *DOGE*, who hadnât been vetted for conflicts of interest, took over the computer systems, which included personal data from bank audits and confidential information on products being developed by tech firms.
Courts intervened, repeatedly, to block Vought from conducting mass firings without the approval of Congress. When he tried to shutter the agency by refusing to request funding for it, they blocked that, too. (The C.F.P.B. draws its budget from the Federal Reserve rather than from taxpayer appropriationsâa structure designed to safeguard its independence.) âRussell Vought illegally fired me twice,â Anne Romatowski, an artificial-intelligence expert who joined the bureau in 2022, said at the protest. She had received a breast-cancer diagnosis the same week that Vought started to lay off the staff. A preliminary injunction allowed her to maintain her health-care plan while she received radiation and chemotherapy.
On the campaign trail, Trump promised to lower grocery and gas prices, and he has inveighed against what he has called the âDemocrat inflation disaster.â Members of his party have demanded an end to bank bailouts, like those made after the 2008 crisis, and warned of an increasingly âfinancialized economyâ dominated by hedge funds and private equity. To the extent that affordability and fairness are a priority, âitâs really stupid to go after the C.F.P.B.,â Alexis Goldstein, a former crypto expert there, told me. The bureau was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the landmark bipartisan legislation intended to âpromote the financial stability of the United Statesâ in the wake of the Great Recession. It enforces more than twenty lawsâthe Fair Debt Collection Practices Act, the Truth in Lending Act, the Electronic Fund Transfer Act, the Home Mortgage Disclosure Act, the Military Lending Actâand has broad discretion to investigate âunfair, deceptive, or abusive acts and practices.â It has recovered twenty-one billion dollars in direct relief for consumers and five billion dollars in civil penalties from a wide range of companies. Millions of Americans have come to it for help; just by filing a complaint online, they have avoided home foreclosures and had student loans forgiven.
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These individual complaints guide the bureauâs systemic work. It has investigated Meta for extracting consumer data for targeted ads, capped credit-card late fees at eight dollars per month, and sued the online lender MoneyLion for overcharging members of the armed forces. It conducts prophylactic auditsâcalled supervisory examsâof the largest banks in the country and, crucially, of other financial firms, such as mortgage servicers, auto lenders, credit-card companies, medical-debt collectors, payday lenders, debt-repair outfits, and âfintechâ businesses that enable mobile banking, payments, and credit. The C.F.P.B. is the only federal entity with the power to supervise these ânon-banks.â
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But now, under Voughtâs leadership, the C.F.P.B. has become a âzombie regulator,â Seth Frotman, its former general counsel, told me. (Vought declined my request for an interview.) The bureau has dropped at least forty lawsuits and other enforcement actions, valued at more than three billion dollars. It ceased supervising big banks and fintechs for compliance, and made it harder to file complaints against credit-reporting agencies. The timing of this pullback couldnât be worse. The Federal Reserve has warned that delinquencies on credit cards and auto loans have reached âlevels not observed since the Great Financial Crisis.â One in five student-loan borrowers is in default. Total consumer debt has hit a record of nearly nineteen trillion dollars; the median household is eighty thousand dollars underwater. The economy is âKâ-shaped, with the rich getting ever richer and the poor skidding down, mired in the feeling, if not yet the fact, of a recessionâwhat the economics writer Kyla Scanlon has termed a âvibecession.â Every day, there are reports of new crypto rackets and wire-transfer scams. âYou can step back from consumer financial regulation, and itâs not a problem until something blows upâand then thereâs a contagion,â Neale Mahoney, an economist at Stanford, told me. âWe wonât know the harm fully until itâs too late.â
From its founding, the C.F.P.B. tried to distinguish itself from other financial regulatorsâthe Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currencyâwhich labored behind the scenes to insure that banks remained solvent but which meant little to ordinary people. The bureau was set up by Senator Elizabeth Warren, a bankruptcy expert who was then on leave from Harvard Law School. Early meetings were held in the hallways of the Treasury Department, and then in a windowless room known as âthe cave.â The C.F.P.B. recruited big-firm lawyers, Silicon Valley coders, Ivy League economists, and hedge-fund alumni, many of whom had never held a government job. Jasmine Hardy joined in 2011, as an examiner in the supervision unit, and later became the vice-president of the employeesâ union. During the financial crisis, she had been a compliance officer at Morgan Stanley, and had watched Lehman Brothers employees lug boxes along Seventh Avenue after that firm collapsed. Some nine million Americans would lose their jobs, and there were nearly four million foreclosures. In her view, Dodd-Frank was a necessary response. âIâve had family and friends who consider themselves conservative who believe in the C.F.P.B. mission,â she told me.
Financial institutions werenât so sanguine. Banks and credit unions were accustomed to being examined for âsafety and soundnessâ (liquidity, in short), not for compliance with an array of consumer-rights laws. Non-banks hadnât been scrutinized much at all. The bureau met with C.E.O.s and consumer advocates, launched its complaint portal, and rushed to issue a string of mortgage rules on deadlines set by Dodd-Frank. In 2013, after it started to request information from banks and payday lenders for monitoring purposes, Senate Republicans called the C.F.P.B. âunaccountable and unrestrainedâ for collecting such âmassive data.â The following year, the bureau ordered Bank of America to refund more than seven hundred million dollars to credit-card users whoâd been sold deceptive add-on products. In 2016, it won a big case against Wells Fargo, whose employees had opened more than a million and a half unauthorized âghost accountsâ to meet sales quotas and collect bonuses, subjecting consumers to charges and fees. The bank agreed to pay full restitution, plus nearly two hundred million dollars in fines and penalties. Still, vilification of the bureau continued. The *Wall Street Journal* accused Richard Cordray, whom Barack Obama had appointed as the agencyâs inaugural director, of causing âsignificant economic harmâ by suggesting that payday lenders, which offer high-interest short-term loans, should have to assess whether customers can actually pay them back. (A lobbying group for the industry filed a lawsuit claiming that the bureau was unconstitutional, but lost at the Supreme Court.)
When President Trump first took office, in 2017, his interim pick to run the C.F.P.B. was Mick Mulvaney, who, like Vought, froze the bureauâs work and requested zero dollars for its budget. Somewhat surprisingly, his Senate-confirmed successor, Kathy Kraninger, appeared interested in actually doing the job. Under her watch, the bureau filed lawsuits against the credit-reporting company Equifax, the loan servicer Navient, and the for-profit-college chain ITT Tech. But it didnât go after big banks or emerging firms, focussing instead on enforcing mortgage rules and pushing financial literacy for consumers. This restrained approach drew criticism during the pandemic, when high unemployment and a flood of stimulus money collided with a profusion of fintech products that made Americans vulnerable to fraud. (Kraninger declined to comment.)
By comparison, Joe Bidenâs nominee to lead the bureau, Rohit Chopra, was bristly and ambitious. He had been with the C.F.P.B. at the beginning, as the student-loan ombudsman, after working for two years as a consultant for McKinsey & Company. âI had a very negative opinion of government and regulators,â he told me late last year, at a coffee shop in Harlem. âI often feel that the status quo has failed us.â He was known as an impatient crusader. One of his advisers described him as the kind of person who at a bachelor party would âhelp the strippers refinance their student loans.â
Chopra left the bureau in 2015. Three years later, he was appointed to the Federal Trade Commission, which, he said, was âessentially in a coma.â Trump was in his first term, and Chopra felt that lackadaisical regulators had set the table for the politics of grievance and resentment that carried him to victory. âThey watched while the opioid crisis raged. They allowed the for-profit college crisis to completely take over. They watched when subprime mortgages happened,â he told me. At the F.T.C., Chopra was alert to the growth of the tech industry; the commission pursued enforcement actions against Amazon, Zoom, NTT Global Data Centers, and Facebook. In the fall of 2021, when he returned to lead the C.F.P.B., it, too, was âa totally moribund agency,â he said. There was âalmost nothing being doneâ to monitor the widespread adoption of fintech apps or âthe entry of the big tech companies into payments and banking.â
Chopra increased the enforcement team by fifty per cent and created a technologistsâ office to advise staff on advances in A.I., digital wallets, and crypto. The bureau took steps to insure that the algorithms used to estimate home values were accurate and fair. It ordered Google, Apple, Facebook, Amazon, Square, and PayPal to âturn over information about their products, plans and practices when it comes to payments.â It issued legal guidance on âbuy now, pay laterâ apps, such as Klarna, PayPal, and Affirm, which allow consumers to purchase anything, from a sweater to groceries to rent, in installments. (According to a recent survey, fifty-five per cent of Americans have done so.) Though early data showed that consumers were following through with their payments, there was a danger that they would engage in âstacking,â or using multiple apps at once, with virtually no guardrails or paper trail, and get unwittingly saddled with fees and interest. The C.F.P.B. also outlined requirements for âearned-wage-accessâ companies, such as Dave and Chime, which give employees an advance on their paychecks. In 2022, the bureau found that more than seven million workers had taken out twenty-two billion dollars in earned-wage accessâup ninety per cent from the previous year. These kinds of fintech products werenât enumerated in Dodd-Frank; they hadnât really existed in 2010. But as Nick Hand, an astrophysicist by training and a former bureau technologist, told me, âThe C.F.P.B. is responsible for banks, lenders, and paymentsâand big tech companies have been creeping into that scope.â
Those companies, and their backers, disagreed. âI do think Chopra went overboard,â James Kim, a partner at the corporate-law firm Cooley and a C.F.P.B. enforcement lawyer during the Cordray years, told me. âThere was a lot of guidance and statements and warnings and pronouncements and interpretive rules. He threw a lot of garbage at the wall at the end.â Marc Andreessen, the prominent venture capitalist, went on Joe Roganâs podcast to complain that the bureau had âterrorized financial institutionsâ and that it wanted to âprevent fintech, prevent new competition, new startups that want to compete with the big banks.â In January, 2025, Mark Zuckerberg, the C.E.O. of Meta, told Rogan that the C.F.P.B. seemed to have an âunderlying political motivationâ for probing his companyâs advertising practices. âWeâre not a bank. What does Meta have to do with this?â Zuckerberg said. Trump fired Chopra a few weeks later and installed Vought as acting director.
Last February, as Vought and *DOGE* began their work, the union representing the C.F.P.B. employees, along with the National Consumer Law Center and the N.A.A.C.P., tried to forestall the destruction. They retained the law firm Gupta Wessler, whose partner Deepak Gupta is a well-known Supreme Court litigator and a former bureau employee. He had started his career at Public Citizen, the advocacy group founded by Ralph Nader, the godfather of the consumer-rights movement. âWhen I was thinking about going to law school, I thought civil rights and civil liberties are the ways that lawyers change the world,â Gupta told me. âBut itâs actually these kinds of problemsâproblems of economic justice, problems of consumer protection and also workersâ rightsâthat are really where the lawâs effects are felt most in peopleâs daily lives.â Gupta keeps pictures of himself with Nader and Warren above his desk.
At a series of emergency court hearings, Guptaâs team presented evidence that Vought had begun an illegal campaign to kill the C.F.P.B. He had cancelled office leases and outside contracts, and even deleted the bureauâs home page. He made plans to fire the vast majority of the bureauâs employees, and advertised a new âTip Lineâ on X: âAre you being pursued by CFPB enforcement or supervision staff, in violation of Acting Director Russ Voughtâs stand down order? If so, DM us or send an email.â
A federal judge in Washington, D.C., granted a preliminary injunction, ordering the bureau to retain employees and perform the obligations laid out under Dodd-Frank. The agency appealed the case, which is ongoing. (At a three-hour oral argument last month, an attorney for the Trump Administration argued that the bureau would technically still exist even if the entire staff was eliminated.) Vought complied with the prohibition against layoffs but didnât let employees do much beyond what his deputy, Adam Martinez, referred to as âcloseout duties.â Workers reluctantly dropped lawsuits and settlements, scrubbed educational materials from the internet, and reversed regulations and interpretive rules. No new companies were examined or investigated. (âWeâve been insanely busy since we took over the agency a year ago,â a C.F.P.B. spokesperson wrote, in an e-mail, contesting this account. âIf you were to pay attention to our reports, court cases, etc you would know that.â) Six months into Voughtâs tenure, Hardy, the examiner, told me, âIâve been given one assignment, and that was to *close* a supervisory action.â Like other federal employees, she was required to list five accomplishments in a weekly e-mail. âIâd just copy and paste: âI did not violate Director Voughtâs stop-work order,â â she said. In July, she met with her manager for a midterm review, but there was nothing to review. The C.F.P.B. has paid hundreds of millions of dollars to employees who arenât allowed to do their jobs. Democrats on the Senate Banking Committee estimate that the bureauâs idleness has cost consumers nearly twenty billion dollars. Trumpâs Council of Economic Advisers countered with a paper stating that the C.F.P.B. had âincreased consumer borrowing costsâ by several hundred billion dollars between 2011 and 2024.
Meanwhile, Vought took five million dollars from the bureauâs budget to pay for his personal security and, in October, bragged on âThe Charlie Kirk Showâ that he would finish closing down the agency âprobably within the next two to three months,â notwithstanding the injunction. Vought repeated Andreessenâs talking points, claiming that the C.F.P.B. âhad the DNA of Elizabeth Warrenâ and wanted to âweaponize the tools of financial laws against basically small mom-and-pop lenders,â despite its historic focus on the largest firms in the country. Last April, in a policy memo laying out âsupervision and enforcement priorities,â Mark Paoletta, the bureauâs chief legal officer, promised to cut examinations by half, go easy on non-banks, and investigate unfair lending only when thereâs already been âproven actual intentional racial discriminationââas though a queue of professed culprits were simply waiting to be handcuffed. The bureau would no longer focus on student loans, medical debt, âinitiatives for âjustice involvedâ individuals (criminals),â or, in a gift to the tech industry, digital payments and âpeer-to-peer platforms and lending.â
Contradictions soon emerged. The policy memo included a promise to focus on âservice members and their families, and veterans.â Yet in early July the bureau withdrew from a consent order that would have returned ninety-five million dollars in surprise overdraft fees to the military customers of Navy Federal Credit Union. (According to the bureau spokesperson, Navy Federal was a âvictim of Chopraâs abuse of power.â) The memo also expressed an intent to step away from potentially âduplicativeâ workâto let states and cities enforce their own consumer-finance laws, a traditionally Republican position. The bureau flipped its stance on that, too. In 2024, the C.F.P.B. had proposed a rule to remove medical debt from credit reports, based on years of research that revealed dodgy practices. Debt collectors often pursued the wrong patients, for example, and tried to recover balances that were more than a decade old. And, because medical debt isnât incurred in the same volitional manner as, say, a Nordstrom credit-card balance, the bureau found it âless predictive of future repayment.â This past spring, Voughtâs C.F.P.B. abandoned the rule. Then, in October, the bureau went further and issued a kind of anti-rule arguing that states may not pass their own laws on credit reporting. Several states had already done so. Iâd seen the impact myself, when I received a doctorâs bill advising me of new âprotections around medical debtâ in New York that banned its use for credit reporting, liens, and wage garnishment. Voughtâs anti-rule, though not binding, cast doubt on the future of such laws.
I recently visited the office of Tzedek DC, a legal-aid nonprofit in Washington, D.C. The organization had been advocating for a local bill to remove medical debt from credit reports, in line with the old federal rule, and was now struggling to respond to the âone-hundred-and-eighty degree change,â as one employee put it. Advocates were referring to the current bureau as âthe evil C.F.P.B.â Two weeks later, during a public hearing on the legislation, a D.C. councilwoman named Christina Henderson acknowledged that the uncertainty could complicate the billâs future. âFrankly, the C.F.P.B. could not exist in, like, a week,â she said.
A similar question mark hovered over new financial tech. Chopraâs bureau had framed âbuy now, pay laterâ products as credit cards, and earned-wage-access products as payday lenders. These categorizations would mean that, for instance, âbuy now, pay laterâ companies would have to investigate disputes, issue refunds, and provide billing statements. Voughtâs C.F.P.B. reversed those interpretations, leaving the states, and consumers, to figure out what rules there were, if any. âThe different âbuy now, pay laterâ platforms have different policies on what happens when you miss a payment or whether itâs reported to a credit bureau,â Kimberly Palmer, a writer at the personal-finance site NerdWallet, told me. âThatâs why itâs important to dig into the disclosures. But itâs hard to do that, because youâre opting in at checkoutâyouâre in a time-pressure situation.â
Conflicting bills on earned-wage access are pending in nearly half the states. Though these products usually advertise themselves as free and interest-free, they often charge hefty fees. Earlier this year, in New York, lawmakers introduced the Stop Taking Our Pay Act, which would define wage advances as loans subject to the stateâs usury statutes. âThese Big Tech finance apps are finding ways and loopholes,â Steven Raga, a state assemblyman, said. A consumer speaking in support of the bill likened the use of earned-wage-access apps to visiting a payday lender or a pawnshop, but âfrom the comfort of my own bed.â The Financial Technology Association, an industry group, is lobbying for a âfederal regulatory frameworkâ that would classify earned-wage access as something other than credit or a loan. Penny Lee, the groupâs president, told me that it simply wants to âhave rules on the books that treat different products differently.â In the meantime, New Yorkâs attorney general is suing the popular earned-wage-access app DailyPay for charging fees that can add up to an A.P.R. of between two hundred and seven hundred and fifty per cent. DailyPay denies that it is making loans at all, and has moved to dismiss the case.
The spectre of freewheeling fintech has unnerved a lot of C.F.P.B. alumni, but none have been as vocal as Frotman, the former general counsel. Post-Biden, Frotman has been a touring Cassandra. âEvery bank wants to be a tech company, and every tech company wants to be a bank,â he often says. I met him in September, at the law school of the University of California, Berkeley. A lecture hall full of aspiring lawyers had been lured by free burritos to listen to him and Sam Levine, a former director of consumer protection at the F.T.C. (Levine would soon take a job with Mayor Zohran Mamdani, leading the New York City Department of Consumer and Worker Protection.) The law student moderating the event was a former C.F.P.B. analyst who wore a âDodd-Frank is pretty greatâ T-shirt under her blazer. Frotman spoke with agitated speed. He compared the current glut of delinquenciesâand lack of oversightâto the conditions that produced the 2008 financial crisis. Back then, the risk was caused by bundled derivatives backed by crappy mortgages. Now, he said, âa whole new asset class of fintech-driven installment productsâ was making it shockingly easy to accumulate debt. âYour income isnât high enough, so weâre going to have your employer give you a payday loan, but just call it earned-wage access. On top of that, you donât have enough money to pay for groceries, so weâll just put it on âbuy now, pay later.â Then you go to the doctor and you canât pay for your kidsâ medicines, so you put it on a deferred-interest credit card. The list just goes on and on.â
Under Biden, the bureau had tried to prevent companies from invoking innovation to escape oversight. It filed lawsuits and proposed rules governing Meta, Google, Amazon, Apple, Square, SoLo Funds, Venmo, PayPal (which recently applied for a bank charter), Zelle (and its owners, Bank of America, JPMorgan Chase, and Wells Fargo), Credova Financial, Cash App, and Walmartâs fintech partner, Branch Messenger. Nearly all of those efforts are now dead. The C.F.P.B.âs inaction, an official warned in federal court, is likely âplanting the seeds for a white-collar financial-crime spree.â
The supervisory exam is one of the quieter, but most effective, tools that the C.F.P.B. has. Every year, the bureau decides on a list of businesses and products that could use a checkup. There might have been a rise in credit scams targeting immigrants and elders, a spate of home foreclosures clustered in the Southwest, or a spike in interest rates on dental credit cards. The companies involved are given two monthsâ notice before a team of examiners inspects call logs, customer records, internal policies, application forms, advertisements, and retail practices. The public doesnât know whoâs being examined, and everything is confidential. Exams sometimes reveal errors or oversights that can be addressed much more cheaply and discreetly than through litigation. A discriminatory algorithm might be reprogrammed; a bank could waive fines or distribute reimbursements. âThere are a lot of consumers who would later get a check, and they didnât know why,â Lorelei Salas, the head of supervision during the Biden Administration, told me. In 2023, for example, exams resulted in refunds of âjunk feesââcharges for paper statements that never arrived, add-on auto insurance that was still billed after a vehicle was repossessedâtotalling a hundred and forty million dollars.
In late January, Victoria Dorfman, a lawyer who, like Vought, was balancing multiple jobs in the Trump Administration, spoke at a virtual meeting of the C.F.P.B.âs supervision unit. During the past year, Dorfman had served as a top lawyer at the Office of Management and Budget, and nominally managed the C.F.P.B.âs enforcement and supervision units. She had previously been a partner at the law firm Jones Day and a clerk for Justice Clarence Thomas. The last time sheâd addressed the examiners had been in November, at a meeting to discuss a new âhumility in supervisions pledge.â At the start of every exam, staff would be required to read the pledge aloud, promising âto work collaborativelyâ with the entity being inspected. Now, on the video call, she emphasized that deference was a guiding principle. âAn examination is not a fishing expedition,â she said. Future exams, she insisted, would be virtual and short.
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The supervision unit had shrunk by thirty per cent. An examiner who was still there told me that he found the call âcondescendingâ and âinfuriating.â The examiner is a veteran, and Dorfmanâs tone reminded him of being dressed down in the military. âI was raging the whole time,â he said. âIt killed the moraleââor whatever was left of it. In 2016 and 2024, the examiner had voted for Trump, angered by the Democratsâ sidelining of Bernie Sanders and drawn to the *MAGA* promise ânot to go to war,â he told me. (In 2020, he voted for the Libertarian candidate, Jo Jorgensen.) But Trumpâs real priorities were becoming clear. âTheyâre cutting taxes for the rich and getting rid of our benefits,â he said. He noted that, though brick-and-mortar banks already have a lot of compliance infrastructure in place, non-banks do not. âAll these tech people are friends with Trump,â the examiner told me. âThey all went on Joe Rogan and started tweeting about the C.F.P.B. at the same time, and now theyâre getting around regulations for their payment platforms.â Trumpâs attitude toward the big banks has been less generous. He is suing JPMorgan Chase (and its chairman and C.E.O., Jamie Dimon) for five billion dollars, alleging that he had been âdebankedâ after January 6th because of his politics.
The examiner tried to maintain some semblance of a routine. He checked his work e-mail and did the occasional follow-up on an old exam. Sometimes he met nearby colleagues for a drink. He cooked and lifted weights and hung out with his fiancĂ©e and their cat. He wrote autofiction and applied for jobs, though there werenât many available: examiners arenât in high demand these days, in the public or the private sector.
This year, Dorfman has proposed sixty-eight examsâless than half the usual number. The list tracks the bureauâs new priorities. There are no fintechs on it, and very few exams pertaining to discrimination in lending. None of the top mortgage lenders is scheduled, âwhich is crazy from a risk perspective,â the examiner said. He worried that the shift to brief, online examsâif the exams happened at allâwould make the process less effective. âYou donât get to see the big picture,â he explained. âYou miss a lot of trends and patterns.â
Another examiner I spoke to had similar concerns. She worried most about non-banks. Over lunch at a pizza restaurant, she recalled doing an exam of a payday-lending franchise in Tennessee. âWe were interviewing the guy who worked there and heard a bunch of rattling in the ceiling,â she said. âI was, like, âOh, is that your A.C. system?â Heâs, like, âItâs rats. Iâve told management about them.â If they didnât care about their employees, that was a sign that theyâre not gonna give a fuck about the customer.â She showed me a stack of old manuals from examiner trainings: âFundamentals of Mortgage Origination 2,â âKnow Before You Owe.â Inside were sample math problems and worksheets that reminded me of high-school calculus. After trying to wait out the tumult at the bureau, this examiner had finally left for a job at a national bank. She observed that the compliance department there was âaware that the C.F.P.B. is kind of moot right now.â The bank wasnât being reckless, but it didnât feel the need to invest in more monitoring, either. She missed her work at the bureau. âThat was my purpose,â she said. âThatâs how I did good in this world.â
Of the seventeen hundred employees who were with the C.F.P.B. in late 2024, about twelve hundred remain. For some, the paycheck is simply hard to beat. (The pay scale of the Federal Reserve System, which includes the bureau, is higher than that of most of the rest of the federal government.) But many workers are still there out of a sense of duty. âIn the trajectory of the country, I know my role is limited,â a senior lawyer at the bureau told me. âBut if people in the eighteen-nineties, when people were striking in mines to prevent being crushed, if they could take bullets to hold the line, then I can desk-jockey this white-collar line from my home office.â
One night in December, I joined a group of employees for dinner at the Washington home of Doug Wilson, a C.F.P.B. enforcement attorney I know from law school. I was the first to arrive and was greeted at the door by two cats and an anxious, big-eyed dog named Jolene. A banner from a recent union protest was rolled up and lying across a couch on the porch. Wilson took me upstairs to his office, which was piled with notes and pleadings. A bound copy of Title X of Dodd-Frank, the section of the statute establishing the C.F.P.B., was on the floor next to his desk.
Wilsonâs guests included litigators, a technologist, and a policy expert. One man described his work as increasingly âperformative.â Heâd recently had to settle a big case on the cheap, and the final agreement undermined âthe whole point of the statute,â he said. He and his colleagues were starting to look for other work. âI donât think anyone thinks the bureau has a master plan,â Wilson told me. If the situation became totally untenable, he would hang a shingle, perhaps starting a solo practice that could âpitch potential enforcement actions to state A.G.s,â he said. (Twenty-one states and the District of Columbia have sued Vought to keep the bureau intact.) Other C.F.P.B. alumni had already taken jobs with state governments, banking regulators, city enforcers, fintechs, and consulting firms. A former bureau lawyer at the New York attorney generalâs office described a burgeoning âC.F.P.B. diaspora.â Wilsonâs former boss, Eric Halperin, was re-creating a version of the bureauâs enforcement division at Protect Borrowers, a consumer-rights nonprofit. Still, Halperin told me, ânothing can take the place of what the bureau, with all its different tools, was able to do.â
The next day, Wilson and other members of the enforcement team gathered for the unitâs annual holiday party, held in the community room of a colleagueâs apartment building. On the way, they received an e-mail from Michael Salemi, the acting enforcement director:
> I have served under every Bureau Director or Acting Director since I started at the Bureau in August 2011. Even if I disagreed with a Directorâs policy direction, I did my best to execute on that direction. I hope that everything I have done at the Bureau has been animated by the Bureauâs statutory objectives, including ensuring that consumers are protected from unfair, deceptive, or abusive acts and practices and from discrimination.
>
> I had hoped to spend the rest of my career advancing that mission at the Bureau. I still hope I can continue that mission, but Iâm disappointed that it wonât be here.
Salemi was the third enforcement director to resign in less than a year. âHe was an incredibly even-tempered person,â Wilson told me. âSo for him to finally find it unsustainable to stay was a real kick in the teeth.â About half of the seventy-five people at the party had already quit. Some flew in from the West Coast, hungry for an opportunity to commiserate. There were Greek kebabs, spiked cranberry punch, wine, beer, and a lot of dark humor. Afterward, the party decamped to Wok and Roll, a karaoke bar. Wilsonâs phone lit up with a link to a *Bloomberg Law* article, in which a C.F.P.B. spokesperson said, of Salemiâs resignation, âNo longer is the Enforcement Division one of thuggery and unprofessional behavior.â And: âDonât let the door hit you on the way out.â
At the bar, Wilson chose a song called âThe Modern Leper,â by the Scottish indie-rock band Frightened Rabbit. The chorus goes like this:
> Is that you in front of me
> Coming back for even more of exactly the same
> You must be a masochist
> To love a modern leper on his last leg
It was a bit of a âvibe killer,â Wilson admitted. The next morning, he went back to work for more of the same. âŠ
Published in the print edition of the [March 16, 2026](https://www.newyorker.com/magazine/2026/03/16), issue, with the headline âPay Later.â
## New Yorker Favorites
- A professor claimed to be Native American. Did she know [she wasnât](https://www.newyorker.com/magazine/2024/03/04/a-professor-claimed-to-be-native-american-did-she-know-she-wasnt)?
- How a homegrown teen gang punctured the [image of an upscale community](https://www.newyorker.com/magazine/2024/07/01/how-a-homegrown-teen-gang-punctured-the-image-of-an-upscale-community).
- The luxury liner that [sailed into a hurricane](https://www.newyorker.com/magazine/1999/10/11/the-ship-that-vanished).
- Kanye West bought an architectural treasureâthen [gave it a violent remix](https://www.newyorker.com/magazine/2024/06/17/kanye-west-tadao-ando-beach-house-malibu).
- Why so many people are going â[no contact](https://www.newyorker.com/culture/annals-of-inquiry/why-so-many-people-are-going-no-contact-with-their-parents)â with their parents.
- Ina Garten and [the age of abundance](https://www.newyorker.com/magazine/2024/09/09/ina-garten-profile).
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[](https://www.newyorker.com/contributors/e-tammy-kim)
[E. Tammy Kim](https://www.newyorker.com/contributors/e-tammy-kim) is a contributing writer at The New Yorker who covers a range of subjects, including politics, labor, and East Asia.
### The New Yorker Classics Newsletter
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A new set of precepts is meant to make the chatbot Claude wise, decent, and safe. It also marks a striking transfer of public responsibility from constitutional government to private tech firms.
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For more than a hundred years, the cityâs most isolated borough has threatened to leave. After the election of Zohran Mamdani, some on the island think itâs time.
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As the planet gets warmer and the rains fall harder, the future of flood control is looking less like a wall and something more like a park.
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High-speed accidents, crooked lawyers, and poor people desperate for cashâit was the kind of scheme that could have been cooked up only in the Big Easy.
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A Reporter at Large
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[](https://www.newyorker.com/magazine/2026/04/06/he-helped-stop-iran-from-getting-the-bomb#intcid=recommendations_the-new-yorker-article-bottom-recirc-personalized_d657ead7-2732-4e54-ac99-365d9828573a_closr_bkta)
A former C.I.A. officer says that he recruited scientists as part of the United Statesâ effort to disrupt Iranâs nuclear program.
By David D. Kirkpatrick
[](https://www.newyorker.com/news/the-lede/what-brought-down-eric-swalwell#intcid=recommendations_the-new-yorker-article-bottom-recirc-personalized_d657ead7-2732-4e54-ac99-365d9828573a_closr_bkta)
The Lede
[What Brought Down Eric Swalwell](https://www.newyorker.com/news/the-lede/what-brought-down-eric-swalwell#intcid=recommendations_the-new-yorker-article-bottom-recirc-personalized_d657ead7-2732-4e54-ac99-365d9828573a_closr_bkta)
[](https://www.newyorker.com/news/the-lede/what-brought-down-eric-swalwell#intcid=recommendations_the-new-yorker-article-bottom-recirc-personalized_d657ead7-2732-4e54-ac99-365d9828573a_closr_bkta)
How the attention economy produced a moment of congressional reckoning.
By Jon Allsop
[](https://www.newyorker.com/magazine/2026/04/13/how-the-internet-fringe-infiltrated-republican-politics#intcid=recommendations_the-new-yorker-article-bottom-recirc-personalized_d657ead7-2732-4e54-ac99-365d9828573a_closr_bkta)
The Political Scene
[How the Internet Fringe Infiltrated Republican Politics](https://www.newyorker.com/magazine/2026/04/13/how-the-internet-fringe-infiltrated-republican-politics#intcid=recommendations_the-new-yorker-article-bottom-recirc-personalized_d657ead7-2732-4e54-ac99-365d9828573a_closr_bkta)
[](https://www.newyorker.com/magazine/2026/04/13/how-the-internet-fringe-infiltrated-republican-politics#intcid=recommendations_the-new-yorker-article-bottom-recirc-personalized_d657ead7-2732-4e54-ac99-365d9828573a_closr_bkta)
Inside the battle for the post-*MAGA* G.O.P.
By Antonia Hitchens
[](https://www.newyorker.com/magazine/2026/03/30/robyn-profile#intcid=recommendations_the-new-yorker-article-bottom-recirc-personalized_d657ead7-2732-4e54-ac99-365d9828573a_closr_bkta)
Profiles
[Robyn, on Her Own](https://www.newyorker.com/magazine/2026/03/30/robyn-profile#intcid=recommendations_the-new-yorker-article-bottom-recirc-personalized_d657ead7-2732-4e54-ac99-365d9828573a_closr_bkta)
[](https://www.newyorker.com/magazine/2026/03/30/robyn-profile#intcid=recommendations_the-new-yorker-article-bottom-recirc-personalized_d657ead7-2732-4e54-ac99-365d9828573a_closr_bkta)
The pop star brings motherhood and middle age to the dance floor.
By Jia Tolentino
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| Readable Markdown | In the fall of 2019, Kashaye Traylor decided to buy a car. She was thirty years old, living in Rochester, New York, and raising a young son on her own. She worked full time at a nursing home and went to school in her off-hours, studying to earn a practical-nursing license. Her schedule was hectic, and often required her to cross town by bus, a time-sucking endeavor. âItâs hard to get around if you donât have a vehicle,â she told me. She saved up her hourly pay and eventually went to a Kia dealership, where she picked out a black 2013 Optima. The cash price was about eleven thousand dollars; the price Traylor was quoted, after factoring in a loan and finance chargesâat an annual percentage rate, or A.P.R., of 22.99 per centâwas twenty-four thousand. âI didnât even know what an A.P.R. was,â she told me. She put down sixteen hundred and agreed to pay three hundred and forty-three dollars per month for the next five and a half years.
Traylor signed a five-page contract created not by the dealership but by Credit Acceptance Corporation, a subprime auto lender, based in Southfield, Michigan, that partners with thousands of car lots across the country. On page 4, the dealership signed over its own interest in the car. âThe Seller has assigned this Contract to Credit Acceptance Corporation,â it stated. âThis assignment is without recourse.â Traylor didnât know it, but it was Credit Acceptance that had set the terms of the deal, using a proprietary algorithm. The algorithm didnât assess her particular financial situation; rather, it calculated how much the company would be able to recover if she didnât follow through with her payments. The lower the predicted recovery amount, the higher the price.
Credit Acceptance advertised its customer base as âcredit challenged Americansâ who deserve âtrust and respectââand, of course, loansââregardless of their credit history.â Yet its business model seemed to depend on those customersâ failure to pay. Sure enough, just a few months into the contract, Traylor started to fall behind, missing due dates and incurring late fees. One day, while she was parking, a vehicle rammed into her car. She wasnât injured, but the Optima was totalled and towed away. She received no insurance money, and Credit Acceptance kept billing her. âThe only thing I got in the mail was what I owed them,â she said. She stopped making payments altogether.
In September, 2022, Credit Acceptance sent Traylor a ânotice of acceleration,â informing her that she was in default for \$15,234.66. (The companyâs letterhead included the tagline âWe change lives!â) The following year, it sued Traylor for that amount, plus interest. She retained Brian Goodwin, a housing and consumer-rights lawyer, who had represented many Credit Acceptance defendants. âIn my opinion, the company sets up these contracts knowing the borrowerâs going to fail,â Goodwin told me. It reminded him of the 2008 global financial crisisââ âGive everyone a mortgage. We donât care if they default. Weâre going to put it into a stock and make a boatload.â â In a court filing, he called Traylorâs contract âunconscionableâ and âusurious,â arguing that it violated a New York statute forbidding interest rates above sixteen per cent. (Credit Acceptance claims that it is covered by an exemption from the cap, because it offers âretail installment contracts,â not traditional loans.) Traylor initially won her case, then lost on appeal. The judgment added to other mounting debts: back rent, student loans. An app that she used for tracking her credit tabulated some forty thousand dollars owed. âPeople are trying to sue me for a car I donât even have,â she said.
Traylorâs experience with Credit Acceptance wasnât unusual. In fact, so many borrowers were delinquent on the companyâs loans that it had attracted the scrutiny of federal law enforcement. In 2023, the same year that Credit Acceptance sued Traylor, the company was itself sued, by the Consumer Financial Protection Bureau, or C.F.P.B.âan agency created in response to the 2008 crisis. The lawsuit, which New York State also joined, accused Credit Acceptance of making âpredatory loans to millions of financially vulnerable consumersâ and âsetting up consumers to fail.â Many of the loans, the suit went on, âexceed state usury caps.â (Credit Acceptance denies this characterization of its practices.) Individual states, including Mississippi and Massachusetts, had sued and obtained settlements with the company before, but only the C.F.P.B. has nationwide jurisdiction. Since 2011, the bureau has received more than twelve thousand complaints against Credit Acceptance.
The C.F.P.B.âs case was well under way when Donald Trump returned to the White House last year. But within a few months the bureau gave up that lawsuit and dozens of other enforcement actionsâagainst businesses ranging from Rocket Homes to Capital One to the rent-to-own lender Snap. Goodwin worried that the Administration was initiating a broader regulatory retreat. âI told my friends and family, I might need to change my job,â he said. âBecause consumer protection is going down.â
The federal building that once housed the C.F.P.B.âs headquarters is now mostly empty. Offices were hastily cleared of computers, paper files, family photos, and tchotchkes. A day-care center in the lobby, called Small Savers, remains open, but the children of C.F.P.B. workers have all but disappeared from its rolls. The parking garage has been transformed into a loading zone. Black S.U.V.s idle there, waiting to chauffeur members of the Trump Administration from the nearby White House complex.
In mid-December, a few dozen C.F.P.B. employees and supporters, wearing puffer coats and Santa hats, gathered for a protest on the brick sidewalk in front of the building. âHow do you spell corruption? E-L-O-N! How do you spell destruction? R-U-S-S!â they yelled, referring to Elon Musk and Russell Vought. Throughout the year, Musk and his so-called Department of Government Efficiency had subjected federal agencies to a combination of insults, shakeups, and random firings. Some two hundred and thirteen thousand civil servants have been let go or pushed to resign. Few agencies were hit as hard as the C.F.P.B., whose mission is to protect consumers and to insure that the markets for financial products âare fair, transparent, and competitive.â Vought, the director of the Office of Management and Budget, who had also been handed control of the C.F.P.B., essentially attempted to liquidate it. He seemed to regard it as an avatar of runaway liberal bureaucracy, a âwokeâ institution that targeted âdisfavored industries and individuals.â (âI donât know why he has such a hard-on for the bureau,â a former lawyer there told me.) Three weeks into the Trump Administration, Vought locked employees out of their offices and told them to âstand downâ from all work; he sent out hundreds of termination e-mails. Young men from *DOGE*, who hadnât been vetted for conflicts of interest, took over the computer systems, which included personal data from bank audits and confidential information on products being developed by tech firms.
Courts intervened, repeatedly, to block Vought from conducting mass firings without the approval of Congress. When he tried to shutter the agency by refusing to request funding for it, they blocked that, too. (The C.F.P.B. draws its budget from the Federal Reserve rather than from taxpayer appropriationsâa structure designed to safeguard its independence.) âRussell Vought illegally fired me twice,â Anne Romatowski, an artificial-intelligence expert who joined the bureau in 2022, said at the protest. She had received a breast-cancer diagnosis the same week that Vought started to lay off the staff. A preliminary injunction allowed her to maintain her health-care plan while she received radiation and chemotherapy.
On the campaign trail, Trump promised to lower grocery and gas prices, and he has inveighed against what he has called the âDemocrat inflation disaster.â Members of his party have demanded an end to bank bailouts, like those made after the 2008 crisis, and warned of an increasingly âfinancialized economyâ dominated by hedge funds and private equity. To the extent that affordability and fairness are a priority, âitâs really stupid to go after the C.F.P.B.,â Alexis Goldstein, a former crypto expert there, told me. The bureau was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the landmark bipartisan legislation intended to âpromote the financial stability of the United Statesâ in the wake of the Great Recession. It enforces more than twenty lawsâthe Fair Debt Collection Practices Act, the Truth in Lending Act, the Electronic Fund Transfer Act, the Home Mortgage Disclosure Act, the Military Lending Actâand has broad discretion to investigate âunfair, deceptive, or abusive acts and practices.â It has recovered twenty-one billion dollars in direct relief for consumers and five billion dollars in civil penalties from a wide range of companies. Millions of Americans have come to it for help; just by filing a complaint online, they have avoided home foreclosures and had student loans forgiven.
[](https://www.newyorker.com/cartoon/a26944) âRawk! You snowflakes arenât brave enough to debate me in the marketplace of ideas. Rawk!â Cartoon by Ellie Black
These individual complaints guide the bureauâs systemic work. It has investigated Meta for extracting consumer data for targeted ads, capped credit-card late fees at eight dollars per month, and sued the online lender MoneyLion for overcharging members of the armed forces. It conducts prophylactic auditsâcalled supervisory examsâof the largest banks in the country and, crucially, of other financial firms, such as mortgage servicers, auto lenders, credit-card companies, medical-debt collectors, payday lenders, debt-repair outfits, and âfintechâ businesses that enable mobile banking, payments, and credit. The C.F.P.B. is the only federal entity with the power to supervise these ânon-banks.â
But now, under Voughtâs leadership, the C.F.P.B. has become a âzombie regulator,â Seth Frotman, its former general counsel, told me. (Vought declined my request for an interview.) The bureau has dropped at least forty lawsuits and other enforcement actions, valued at more than three billion dollars. It ceased supervising big banks and fintechs for compliance, and made it harder to file complaints against credit-reporting agencies. The timing of this pullback couldnât be worse. The Federal Reserve has warned that delinquencies on credit cards and auto loans have reached âlevels not observed since the Great Financial Crisis.â One in five student-loan borrowers is in default. Total consumer debt has hit a record of nearly nineteen trillion dollars; the median household is eighty thousand dollars underwater. The economy is âKâ-shaped, with the rich getting ever richer and the poor skidding down, mired in the feeling, if not yet the fact, of a recessionâwhat the economics writer Kyla Scanlon has termed a âvibecession.â Every day, there are reports of new crypto rackets and wire-transfer scams. âYou can step back from consumer financial regulation, and itâs not a problem until something blows upâand then thereâs a contagion,â Neale Mahoney, an economist at Stanford, told me. âWe wonât know the harm fully until itâs too late.â
From its founding, the C.F.P.B. tried to distinguish itself from other financial regulatorsâthe Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currencyâwhich labored behind the scenes to insure that banks remained solvent but which meant little to ordinary people. The bureau was set up by Senator Elizabeth Warren, a bankruptcy expert who was then on leave from Harvard Law School. Early meetings were held in the hallways of the Treasury Department, and then in a windowless room known as âthe cave.â The C.F.P.B. recruited big-firm lawyers, Silicon Valley coders, Ivy League economists, and hedge-fund alumni, many of whom had never held a government job. Jasmine Hardy joined in 2011, as an examiner in the supervision unit, and later became the vice-president of the employeesâ union. During the financial crisis, she had been a compliance officer at Morgan Stanley, and had watched Lehman Brothers employees lug boxes along Seventh Avenue after that firm collapsed. Some nine million Americans would lose their jobs, and there were nearly four million foreclosures. In her view, Dodd-Frank was a necessary response. âIâve had family and friends who consider themselves conservative who believe in the C.F.P.B. mission,â she told me.
Financial institutions werenât so sanguine. Banks and credit unions were accustomed to being examined for âsafety and soundnessâ (liquidity, in short), not for compliance with an array of consumer-rights laws. Non-banks hadnât been scrutinized much at all. The bureau met with C.E.O.s and consumer advocates, launched its complaint portal, and rushed to issue a string of mortgage rules on deadlines set by Dodd-Frank. In 2013, after it started to request information from banks and payday lenders for monitoring purposes, Senate Republicans called the C.F.P.B. âunaccountable and unrestrainedâ for collecting such âmassive data.â The following year, the bureau ordered Bank of America to refund more than seven hundred million dollars to credit-card users whoâd been sold deceptive add-on products. In 2016, it won a big case against Wells Fargo, whose employees had opened more than a million and a half unauthorized âghost accountsâ to meet sales quotas and collect bonuses, subjecting consumers to charges and fees. The bank agreed to pay full restitution, plus nearly two hundred million dollars in fines and penalties. Still, vilification of the bureau continued. The *Wall Street Journal* accused Richard Cordray, whom Barack Obama had appointed as the agencyâs inaugural director, of causing âsignificant economic harmâ by suggesting that payday lenders, which offer high-interest short-term loans, should have to assess whether customers can actually pay them back. (A lobbying group for the industry filed a lawsuit claiming that the bureau was unconstitutional, but lost at the Supreme Court.)
When President Trump first took office, in 2017, his interim pick to run the C.F.P.B. was Mick Mulvaney, who, like Vought, froze the bureauâs work and requested zero dollars for its budget. Somewhat surprisingly, his Senate-confirmed successor, Kathy Kraninger, appeared interested in actually doing the job. Under her watch, the bureau filed lawsuits against the credit-reporting company Equifax, the loan servicer Navient, and the for-profit-college chain ITT Tech. But it didnât go after big banks or emerging firms, focussing instead on enforcing mortgage rules and pushing financial literacy for consumers. This restrained approach drew criticism during the pandemic, when high unemployment and a flood of stimulus money collided with a profusion of fintech products that made Americans vulnerable to fraud. (Kraninger declined to comment.)
By comparison, Joe Bidenâs nominee to lead the bureau, Rohit Chopra, was bristly and ambitious. He had been with the C.F.P.B. at the beginning, as the student-loan ombudsman, after working for two years as a consultant for McKinsey & Company. âI had a very negative opinion of government and regulators,â he told me late last year, at a coffee shop in Harlem. âI often feel that the status quo has failed us.â He was known as an impatient crusader. One of his advisers described him as the kind of person who at a bachelor party would âhelp the strippers refinance their student loans.â
Chopra left the bureau in 2015. Three years later, he was appointed to the Federal Trade Commission, which, he said, was âessentially in a coma.â Trump was in his first term, and Chopra felt that lackadaisical regulators had set the table for the politics of grievance and resentment that carried him to victory. âThey watched while the opioid crisis raged. They allowed the for-profit college crisis to completely take over. They watched when subprime mortgages happened,â he told me. At the F.T.C., Chopra was alert to the growth of the tech industry; the commission pursued enforcement actions against Amazon, Zoom, NTT Global Data Centers, and Facebook. In the fall of 2021, when he returned to lead the C.F.P.B., it, too, was âa totally moribund agency,â he said. There was âalmost nothing being doneâ to monitor the widespread adoption of fintech apps or âthe entry of the big tech companies into payments and banking.â
Chopra increased the enforcement team by fifty per cent and created a technologistsâ office to advise staff on advances in A.I., digital wallets, and crypto. The bureau took steps to insure that the algorithms used to estimate home values were accurate and fair. It ordered Google, Apple, Facebook, Amazon, Square, and PayPal to âturn over information about their products, plans and practices when it comes to payments.â It issued legal guidance on âbuy now, pay laterâ apps, such as Klarna, PayPal, and Affirm, which allow consumers to purchase anything, from a sweater to groceries to rent, in installments. (According to a recent survey, fifty-five per cent of Americans have done so.) Though early data showed that consumers were following through with their payments, there was a danger that they would engage in âstacking,â or using multiple apps at once, with virtually no guardrails or paper trail, and get unwittingly saddled with fees and interest. The C.F.P.B. also outlined requirements for âearned-wage-accessâ companies, such as Dave and Chime, which give employees an advance on their paychecks. In 2022, the bureau found that more than seven million workers had taken out twenty-two billion dollars in earned-wage accessâup ninety per cent from the previous year. These kinds of fintech products werenât enumerated in Dodd-Frank; they hadnât really existed in 2010. But as Nick Hand, an astrophysicist by training and a former bureau technologist, told me, âThe C.F.P.B. is responsible for banks, lenders, and paymentsâand big tech companies have been creeping into that scope.â
Those companies, and their backers, disagreed. âI do think Chopra went overboard,â James Kim, a partner at the corporate-law firm Cooley and a C.F.P.B. enforcement lawyer during the Cordray years, told me. âThere was a lot of guidance and statements and warnings and pronouncements and interpretive rules. He threw a lot of garbage at the wall at the end.â Marc Andreessen, the prominent venture capitalist, went on Joe Roganâs podcast to complain that the bureau had âterrorized financial institutionsâ and that it wanted to âprevent fintech, prevent new competition, new startups that want to compete with the big banks.â In January, 2025, Mark Zuckerberg, the C.E.O. of Meta, told Rogan that the C.F.P.B. seemed to have an âunderlying political motivationâ for probing his companyâs advertising practices. âWeâre not a bank. What does Meta have to do with this?â Zuckerberg said. Trump fired Chopra a few weeks later and installed Vought as acting director.
Last February, as Vought and *DOGE* began their work, the union representing the C.F.P.B. employees, along with the National Consumer Law Center and the N.A.A.C.P., tried to forestall the destruction. They retained the law firm Gupta Wessler, whose partner Deepak Gupta is a well-known Supreme Court litigator and a former bureau employee. He had started his career at Public Citizen, the advocacy group founded by Ralph Nader, the godfather of the consumer-rights movement. âWhen I was thinking about going to law school, I thought civil rights and civil liberties are the ways that lawyers change the world,â Gupta told me. âBut itâs actually these kinds of problemsâproblems of economic justice, problems of consumer protection and also workersâ rightsâthat are really where the lawâs effects are felt most in peopleâs daily lives.â Gupta keeps pictures of himself with Nader and Warren above his desk.
At a series of emergency court hearings, Guptaâs team presented evidence that Vought had begun an illegal campaign to kill the C.F.P.B. He had cancelled office leases and outside contracts, and even deleted the bureauâs home page. He made plans to fire the vast majority of the bureauâs employees, and advertised a new âTip Lineâ on X: âAre you being pursued by CFPB enforcement or supervision staff, in violation of Acting Director Russ Voughtâs stand down order? If so, DM us or send an email.â
A federal judge in Washington, D.C., granted a preliminary injunction, ordering the bureau to retain employees and perform the obligations laid out under Dodd-Frank. The agency appealed the case, which is ongoing. (At a three-hour oral argument last month, an attorney for the Trump Administration argued that the bureau would technically still exist even if the entire staff was eliminated.) Vought complied with the prohibition against layoffs but didnât let employees do much beyond what his deputy, Adam Martinez, referred to as âcloseout duties.â Workers reluctantly dropped lawsuits and settlements, scrubbed educational materials from the internet, and reversed regulations and interpretive rules. No new companies were examined or investigated. (âWeâve been insanely busy since we took over the agency a year ago,â a C.F.P.B. spokesperson wrote, in an e-mail, contesting this account. âIf you were to pay attention to our reports, court cases, etc you would know that.â) Six months into Voughtâs tenure, Hardy, the examiner, told me, âIâve been given one assignment, and that was to *close* a supervisory action.â Like other federal employees, she was required to list five accomplishments in a weekly e-mail. âIâd just copy and paste: âI did not violate Director Voughtâs stop-work order,â â she said. In July, she met with her manager for a midterm review, but there was nothing to review. The C.F.P.B. has paid hundreds of millions of dollars to employees who arenât allowed to do their jobs. Democrats on the Senate Banking Committee estimate that the bureauâs idleness has cost consumers nearly twenty billion dollars. Trumpâs Council of Economic Advisers countered with a paper stating that the C.F.P.B. had âincreased consumer borrowing costsâ by several hundred billion dollars between 2011 and 2024.
Meanwhile, Vought took five million dollars from the bureauâs budget to pay for his personal security and, in October, bragged on âThe Charlie Kirk Showâ that he would finish closing down the agency âprobably within the next two to three months,â notwithstanding the injunction. Vought repeated Andreessenâs talking points, claiming that the C.F.P.B. âhad the DNA of Elizabeth Warrenâ and wanted to âweaponize the tools of financial laws against basically small mom-and-pop lenders,â despite its historic focus on the largest firms in the country. Last April, in a policy memo laying out âsupervision and enforcement priorities,â Mark Paoletta, the bureauâs chief legal officer, promised to cut examinations by half, go easy on non-banks, and investigate unfair lending only when thereâs already been âproven actual intentional racial discriminationââas though a queue of professed culprits were simply waiting to be handcuffed. The bureau would no longer focus on student loans, medical debt, âinitiatives for âjustice involvedâ individuals (criminals),â or, in a gift to the tech industry, digital payments and âpeer-to-peer platforms and lending.â
Contradictions soon emerged. The policy memo included a promise to focus on âservice members and their families, and veterans.â Yet in early July the bureau withdrew from a consent order that would have returned ninety-five million dollars in surprise overdraft fees to the military customers of Navy Federal Credit Union. (According to the bureau spokesperson, Navy Federal was a âvictim of Chopraâs abuse of power.â) The memo also expressed an intent to step away from potentially âduplicativeâ workâto let states and cities enforce their own consumer-finance laws, a traditionally Republican position. The bureau flipped its stance on that, too. In 2024, the C.F.P.B. had proposed a rule to remove medical debt from credit reports, based on years of research that revealed dodgy practices. Debt collectors often pursued the wrong patients, for example, and tried to recover balances that were more than a decade old. And, because medical debt isnât incurred in the same volitional manner as, say, a Nordstrom credit-card balance, the bureau found it âless predictive of future repayment.â This past spring, Voughtâs C.F.P.B. abandoned the rule. Then, in October, the bureau went further and issued a kind of anti-rule arguing that states may not pass their own laws on credit reporting. Several states had already done so. Iâd seen the impact myself, when I received a doctorâs bill advising me of new âprotections around medical debtâ in New York that banned its use for credit reporting, liens, and wage garnishment. Voughtâs anti-rule, though not binding, cast doubt on the future of such laws.
I recently visited the office of Tzedek DC, a legal-aid nonprofit in Washington, D.C. The organization had been advocating for a local bill to remove medical debt from credit reports, in line with the old federal rule, and was now struggling to respond to the âone-hundred-and-eighty degree change,â as one employee put it. Advocates were referring to the current bureau as âthe evil C.F.P.B.â Two weeks later, during a public hearing on the legislation, a D.C. councilwoman named Christina Henderson acknowledged that the uncertainty could complicate the billâs future. âFrankly, the C.F.P.B. could not exist in, like, a week,â she said.
A similar question mark hovered over new financial tech. Chopraâs bureau had framed âbuy now, pay laterâ products as credit cards, and earned-wage-access products as payday lenders. These categorizations would mean that, for instance, âbuy now, pay laterâ companies would have to investigate disputes, issue refunds, and provide billing statements. Voughtâs C.F.P.B. reversed those interpretations, leaving the states, and consumers, to figure out what rules there were, if any. âThe different âbuy now, pay laterâ platforms have different policies on what happens when you miss a payment or whether itâs reported to a credit bureau,â Kimberly Palmer, a writer at the personal-finance site NerdWallet, told me. âThatâs why itâs important to dig into the disclosures. But itâs hard to do that, because youâre opting in at checkoutâyouâre in a time-pressure situation.â
Conflicting bills on earned-wage access are pending in nearly half the states. Though these products usually advertise themselves as free and interest-free, they often charge hefty fees. Earlier this year, in New York, lawmakers introduced the Stop Taking Our Pay Act, which would define wage advances as loans subject to the stateâs usury statutes. âThese Big Tech finance apps are finding ways and loopholes,â Steven Raga, a state assemblyman, said. A consumer speaking in support of the bill likened the use of earned-wage-access apps to visiting a payday lender or a pawnshop, but âfrom the comfort of my own bed.â The Financial Technology Association, an industry group, is lobbying for a âfederal regulatory frameworkâ that would classify earned-wage access as something other than credit or a loan. Penny Lee, the groupâs president, told me that it simply wants to âhave rules on the books that treat different products differently.â In the meantime, New Yorkâs attorney general is suing the popular earned-wage-access app DailyPay for charging fees that can add up to an A.P.R. of between two hundred and seven hundred and fifty per cent. DailyPay denies that it is making loans at all, and has moved to dismiss the case.
The spectre of freewheeling fintech has unnerved a lot of C.F.P.B. alumni, but none have been as vocal as Frotman, the former general counsel. Post-Biden, Frotman has been a touring Cassandra. âEvery bank wants to be a tech company, and every tech company wants to be a bank,â he often says. I met him in September, at the law school of the University of California, Berkeley. A lecture hall full of aspiring lawyers had been lured by free burritos to listen to him and Sam Levine, a former director of consumer protection at the F.T.C. (Levine would soon take a job with Mayor Zohran Mamdani, leading the New York City Department of Consumer and Worker Protection.) The law student moderating the event was a former C.F.P.B. analyst who wore a âDodd-Frank is pretty greatâ T-shirt under her blazer. Frotman spoke with agitated speed. He compared the current glut of delinquenciesâand lack of oversightâto the conditions that produced the 2008 financial crisis. Back then, the risk was caused by bundled derivatives backed by crappy mortgages. Now, he said, âa whole new asset class of fintech-driven installment productsâ was making it shockingly easy to accumulate debt. âYour income isnât high enough, so weâre going to have your employer give you a payday loan, but just call it earned-wage access. On top of that, you donât have enough money to pay for groceries, so weâll just put it on âbuy now, pay later.â Then you go to the doctor and you canât pay for your kidsâ medicines, so you put it on a deferred-interest credit card. The list just goes on and on.â
Under Biden, the bureau had tried to prevent companies from invoking innovation to escape oversight. It filed lawsuits and proposed rules governing Meta, Google, Amazon, Apple, Square, SoLo Funds, Venmo, PayPal (which recently applied for a bank charter), Zelle (and its owners, Bank of America, JPMorgan Chase, and Wells Fargo), Credova Financial, Cash App, and Walmartâs fintech partner, Branch Messenger. Nearly all of those efforts are now dead. The C.F.P.B.âs inaction, an official warned in federal court, is likely âplanting the seeds for a white-collar financial-crime spree.â
The supervisory exam is one of the quieter, but most effective, tools that the C.F.P.B. has. Every year, the bureau decides on a list of businesses and products that could use a checkup. There might have been a rise in credit scams targeting immigrants and elders, a spate of home foreclosures clustered in the Southwest, or a spike in interest rates on dental credit cards. The companies involved are given two monthsâ notice before a team of examiners inspects call logs, customer records, internal policies, application forms, advertisements, and retail practices. The public doesnât know whoâs being examined, and everything is confidential. Exams sometimes reveal errors or oversights that can be addressed much more cheaply and discreetly than through litigation. A discriminatory algorithm might be reprogrammed; a bank could waive fines or distribute reimbursements. âThere are a lot of consumers who would later get a check, and they didnât know why,â Lorelei Salas, the head of supervision during the Biden Administration, told me. In 2023, for example, exams resulted in refunds of âjunk feesââcharges for paper statements that never arrived, add-on auto insurance that was still billed after a vehicle was repossessedâtotalling a hundred and forty million dollars.
In late January, Victoria Dorfman, a lawyer who, like Vought, was balancing multiple jobs in the Trump Administration, spoke at a virtual meeting of the C.F.P.B.âs supervision unit. During the past year, Dorfman had served as a top lawyer at the Office of Management and Budget, and nominally managed the C.F.P.B.âs enforcement and supervision units. She had previously been a partner at the law firm Jones Day and a clerk for Justice Clarence Thomas. The last time sheâd addressed the examiners had been in November, at a meeting to discuss a new âhumility in supervisions pledge.â At the start of every exam, staff would be required to read the pledge aloud, promising âto work collaborativelyâ with the entity being inspected. Now, on the video call, she emphasized that deference was a guiding principle. âAn examination is not a fishing expedition,â she said. Future exams, she insisted, would be virtual and short.
[](https://www.newyorker.com/cartoon/a26892) âDo you want to be friends? The kind where youâre always the one who has to reach out?â Cartoon by Jon Adams
The supervision unit had shrunk by thirty per cent. An examiner who was still there told me that he found the call âcondescendingâ and âinfuriating.â The examiner is a veteran, and Dorfmanâs tone reminded him of being dressed down in the military. âI was raging the whole time,â he said. âIt killed the moraleââor whatever was left of it. In 2016 and 2024, the examiner had voted for Trump, angered by the Democratsâ sidelining of Bernie Sanders and drawn to the *MAGA* promise ânot to go to war,â he told me. (In 2020, he voted for the Libertarian candidate, Jo Jorgensen.) But Trumpâs real priorities were becoming clear. âTheyâre cutting taxes for the rich and getting rid of our benefits,â he said. He noted that, though brick-and-mortar banks already have a lot of compliance infrastructure in place, non-banks do not. âAll these tech people are friends with Trump,â the examiner told me. âThey all went on Joe Rogan and started tweeting about the C.F.P.B. at the same time, and now theyâre getting around regulations for their payment platforms.â Trumpâs attitude toward the big banks has been less generous. He is suing JPMorgan Chase (and its chairman and C.E.O., Jamie Dimon) for five billion dollars, alleging that he had been âdebankedâ after January 6th because of his politics.
The examiner tried to maintain some semblance of a routine. He checked his work e-mail and did the occasional follow-up on an old exam. Sometimes he met nearby colleagues for a drink. He cooked and lifted weights and hung out with his fiancĂ©e and their cat. He wrote autofiction and applied for jobs, though there werenât many available: examiners arenât in high demand these days, in the public or the private sector.
This year, Dorfman has proposed sixty-eight examsâless than half the usual number. The list tracks the bureauâs new priorities. There are no fintechs on it, and very few exams pertaining to discrimination in lending. None of the top mortgage lenders is scheduled, âwhich is crazy from a risk perspective,â the examiner said. He worried that the shift to brief, online examsâif the exams happened at allâwould make the process less effective. âYou donât get to see the big picture,â he explained. âYou miss a lot of trends and patterns.â
Another examiner I spoke to had similar concerns. She worried most about non-banks. Over lunch at a pizza restaurant, she recalled doing an exam of a payday-lending franchise in Tennessee. âWe were interviewing the guy who worked there and heard a bunch of rattling in the ceiling,â she said. âI was, like, âOh, is that your A.C. system?â Heâs, like, âItâs rats. Iâve told management about them.â If they didnât care about their employees, that was a sign that theyâre not gonna give a fuck about the customer.â She showed me a stack of old manuals from examiner trainings: âFundamentals of Mortgage Origination 2,â âKnow Before You Owe.â Inside were sample math problems and worksheets that reminded me of high-school calculus. After trying to wait out the tumult at the bureau, this examiner had finally left for a job at a national bank. She observed that the compliance department there was âaware that the C.F.P.B. is kind of moot right now.â The bank wasnât being reckless, but it didnât feel the need to invest in more monitoring, either. She missed her work at the bureau. âThat was my purpose,â she said. âThatâs how I did good in this world.â
Of the seventeen hundred employees who were with the C.F.P.B. in late 2024, about twelve hundred remain. For some, the paycheck is simply hard to beat. (The pay scale of the Federal Reserve System, which includes the bureau, is higher than that of most of the rest of the federal government.) But many workers are still there out of a sense of duty. âIn the trajectory of the country, I know my role is limited,â a senior lawyer at the bureau told me. âBut if people in the eighteen-nineties, when people were striking in mines to prevent being crushed, if they could take bullets to hold the line, then I can desk-jockey this white-collar line from my home office.â
One night in December, I joined a group of employees for dinner at the Washington home of Doug Wilson, a C.F.P.B. enforcement attorney I know from law school. I was the first to arrive and was greeted at the door by two cats and an anxious, big-eyed dog named Jolene. A banner from a recent union protest was rolled up and lying across a couch on the porch. Wilson took me upstairs to his office, which was piled with notes and pleadings. A bound copy of Title X of Dodd-Frank, the section of the statute establishing the C.F.P.B., was on the floor next to his desk.
Wilsonâs guests included litigators, a technologist, and a policy expert. One man described his work as increasingly âperformative.â Heâd recently had to settle a big case on the cheap, and the final agreement undermined âthe whole point of the statute,â he said. He and his colleagues were starting to look for other work. âI donât think anyone thinks the bureau has a master plan,â Wilson told me. If the situation became totally untenable, he would hang a shingle, perhaps starting a solo practice that could âpitch potential enforcement actions to state A.G.s,â he said. (Twenty-one states and the District of Columbia have sued Vought to keep the bureau intact.) Other C.F.P.B. alumni had already taken jobs with state governments, banking regulators, city enforcers, fintechs, and consulting firms. A former bureau lawyer at the New York attorney generalâs office described a burgeoning âC.F.P.B. diaspora.â Wilsonâs former boss, Eric Halperin, was re-creating a version of the bureauâs enforcement division at Protect Borrowers, a consumer-rights nonprofit. Still, Halperin told me, ânothing can take the place of what the bureau, with all its different tools, was able to do.â
The next day, Wilson and other members of the enforcement team gathered for the unitâs annual holiday party, held in the community room of a colleagueâs apartment building. On the way, they received an e-mail from Michael Salemi, the acting enforcement director:
> I have served under every Bureau Director or Acting Director since I started at the Bureau in August 2011. Even if I disagreed with a Directorâs policy direction, I did my best to execute on that direction. I hope that everything I have done at the Bureau has been animated by the Bureauâs statutory objectives, including ensuring that consumers are protected from unfair, deceptive, or abusive acts and practices and from discrimination.
>
> I had hoped to spend the rest of my career advancing that mission at the Bureau. I still hope I can continue that mission, but Iâm disappointed that it wonât be here.
Salemi was the third enforcement director to resign in less than a year. âHe was an incredibly even-tempered person,â Wilson told me. âSo for him to finally find it unsustainable to stay was a real kick in the teeth.â About half of the seventy-five people at the party had already quit. Some flew in from the West Coast, hungry for an opportunity to commiserate. There were Greek kebabs, spiked cranberry punch, wine, beer, and a lot of dark humor. Afterward, the party decamped to Wok and Roll, a karaoke bar. Wilsonâs phone lit up with a link to a *Bloomberg Law* article, in which a C.F.P.B. spokesperson said, of Salemiâs resignation, âNo longer is the Enforcement Division one of thuggery and unprofessional behavior.â And: âDonât let the door hit you on the way out.â
At the bar, Wilson chose a song called âThe Modern Leper,â by the Scottish indie-rock band Frightened Rabbit. The chorus goes like this:
> Is that you in front of me
> Coming back for even more of exactly the same
> You must be a masochist
> To love a modern leper on his last leg
It was a bit of a âvibe killer,â Wilson admitted. The next morning, he went back to work for more of the same. ⊠|
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