What Is the Consumer Financial Protection Bureau and Why Does It Matter?

Born out of the 2008 Great Recession, the CFPB was envisioned as an independent watchdog that would make sure the biggest U.S. banks and credit unions, credit reporting agencies, mortgage lenders, and debt collectors play by the rules. 

At its core, the CFPB has two main jobs. 

One is maintaining and reviewing a massive complaint database, where consumers can go to seek redress when they think they’ve been cheated or treated unfairly by a financial service company. The database—which is searchable by company name, the type of financial product, ZIP code, and more—has more than 9.6 million consumer complaints. In 2024 alone, the CFPB passed along more than 2.8 million consumer complaints, more than double the number from the previous year.

“The CFPB created a world-class complaint process that has helped millions of consumers report, review, and, in some cases, resolve complaints with financial service companies,” says Ruth Susswein, director of consumer protection for the nonprofit group Consumer Action, who has previously led efforts to save the complaint database from being taken offline. “Just the fact that there is a place to publicly log these problems helps to dissuade some companies from engaging in harmful behavior.” 

Susswein points to at least three major benefits of the database: 

1. It forces financial companies to respond to problems that they otherwise might refuse to acknowledge or resolve. When the CFPB forwards a complaint, the company is expected to respond within 15 days. Consumer complaints sometimes lead to sizable refunds. An academic working paper published in May 2025 found that the average payout for each “successful” complaint had more than tripled over the past decade—from $694 in 2014 to $2,280 in 2024, an amount that can be a lifeline for many families. 

And the number of complaints filed to the CFPB has steadily increased by an average of 10 percent each year, researchers have found, a sign that consumers see the value in an independent mediator.

2. The database enables consumers to check on companies before entrusting them with their money, potentially warning them if, for example, a firm has been hit with repeated complaints. 

3. Regulators, policymakers, and researchers use the database to identify and expose problematic trends in the marketplace. For example, complaints regarding inaccurate credit reports and surprise debts increased by triple-digit percentages in 2024 compared with the previous two years. 

The CFPB’s other core role is the deployment of an army of bank compliance examiners, attorneys, and researchers, who:

• Embed themselves at financial companies, making sure their products and accounting methods comply with consumer protection laws.
• Look at new fintech companies and products to see whether they have created, or are exploiting, regulatory gaps.
• Work closely with state-level financial regulators to spot and rein in repeat offenders who, when scrutinized or prosecuted in one jurisdiction, pack up their tents and move to another.

A majority appear to broadly support the agency’s mission. A survey of 1,029 people released in March found that roughly 67 percent favored the consumer watchdog, including 60 percent of Republicans, 68 percent of independents, and 84 percent of Democrats. (The poll was commissioned by two nonprofits that support tougher consumer financial regulations, the Center for Responsible Lending and Americans for Financial Reform.)

According to a nationally representative Consumer Reports survey of 2,333 adults in the U.S. conducted in May 2025, a majority said that regulatory work to make sure that companies keep consumers’ financial data private and safe from hackers and fraud was relevant to them personally. The survey also showed that nearly half of U.S. consumers support federal oversight of peer-to-peer payment apps, such as Zelle and Venmo, to ward off online fraud and scams. 

The CFPB has been in the crosshairs of pro-business and trade groups throughout its 14-year history. 

The payday lending industry, for example, has consistently resisted efforts to restrict certain business practices that the agency has labeled as predatory. Tech industry trade groups, such as the Financial Technology Association and TechNet, have sued the CFPB, with the latter arguing that what it calls a “one-size-fits-all approach” to regulating digital payment apps imposes excessive compliance burdens. And certain Silicon Valley tech executives, including Elon Musk and Marc Andreessen, have argued that the watchdog’s enforcement efforts are duplicative and stifle some tech startups. 

In addition to fighting particular CFPB policies, the agency’s critics have more recently been targeting its structure and independence. Project 2025, the Heritage Foundation-supported blueprint for how the White House might approach the federal government’s agencies and priorities, argued for eliminating the CFPB on the grounds that its independence and funding structure make it “utterly unaccountable” and therefore “unconstitutional.” 

The CFPB receives its funding not through the politically charged Congressional appropriations process but from the independently run Federal Reserve. This was intentional—an effort to insulate the agency’s work from political influence—and the CFPB is hardly the only federal regulatory agency with an independent funding source. Another example, in addition to the Fed itself, is the Federal Deposit Insurance Corporation, which insures deposits in commercial and savings banks.

Indeed, a 7-to-2 Supreme Court ruling in 2024 found the CFPB’s funding structure to be constitutional, with conservative Justice Clarence Thomas writing for the majority.

Recently departed staffers maintain that the current administration is simply taking a new approach to reining in the agency. Rather than attack it head on, they say, it’s quietly draining the staff, resources, and authority it needs to be effective. 

In April, acting CFPB leaders tried to lay off all but roughly 200 of the agency’s staff and reduce its day-to-day work to just a handful of legally required administrative tasks. The employees targeted included about 90 percent of the bank examiners, according to documents filed as part of a federal lawsuit brought by the CFPB’s employees union against the current administration. The remaining 50 would have been forced to relocate to Atlanta as a cost-cutting measure. 

A judge’s order put those plans on hold, but on Aug. 15, a three-judge federal appeals court reversed the order, ruling in a 2-to-1 decision that there was no evidence that a smaller CFPB could not fulfill its legally required tasks and clearing the way for the layoffs. As of early September, however, the CFPB was still paying more than 1,600 full-time employees.

Its current leadership has indicated that the agency will have a limited purview. They have told staffers they plan to deprioritize examinations of nonbank lenders, including mortgage companies like Rocket Homes that now underwrite a majority of new loans in the U.S. A CFPB enforcement case against Rocket was dropped in February.  

“The mortgage industry, nonbank lenders, fintech products. If there’s no cop on the beat, so to speak, it’s really scary to think about what could go wrong,” says Brad Lipton, who worked as an attorney for the CFPB for more than 11 years, through both Democratic and Republican administrations, before leaving in March 2025.

Bank examinations and supervision have also mostly been halted, according to court filings. And the CFPB has dropped almost two dozen civil lawsuits against companies it had been pursuing in federal court for a range of alleged misdeeds, including misleading consumers about savings account interest rates and failing to protect payment app users from fraud. 

The cases include, for example, one against Capital One for allegedly deceiving customers about a low-interest savings account while marketing a nearly identical high-interest product, resulting in $2 billion in losses. Another dropped case had been brought against the operator of Zelle and the three banks that jointly own it for allegedly failing to implement effective safeguards against widespread fraud on its payment network. Consumers have reported losing at least $870 million through Zelle-enabled fraud and scams since 2017. 

The CFPB has also terminated “negotiated settlements that let wrongdoers off the hook,” wrote Cara Petersen, the CFPB’s former acting enforcement director. Peterson quit in June in protest of what she called the “dismantling” of the agency’s enforcement arm and the “inexplicable dismissals of cases.”

Acting CFPB leaders have said they will continue to bring civil cases to protect military service members and veterans and to address what they describe as “actual tangible consumer harm and intentional discrimination.” For example, it is continuing to pursue a lawsuit against MoneyLion, the payday cash advance app that allegedly imposed excessive charges on military service members and their families in violation of the Military Lending Act and the Consumer Financial Protection Act.

The CFPB’s consumer complaint database was still operating as of early September. But agency officials warn that if the current administration is able to follow through on its plan to lay off roughly 90 percent of the agency’s staff, the complaint portal and website won’t have enough people to process, route, and monitor what it receives, effectively shutting it down.

Lipton says that if the proposed cuts go into effect, the department won’t have the funding or staff to conduct investigations and litigate cases at all.

“If staffing does go down to the lowest levels in the agency’s history, at a time when our exposure to certain financial products is much greater, it will end up being open season on consumers,” he says.

More broadly, consumer advocates are concerned that if the CFPB is ultimately diminished or shuttered, consumers will be left to navigate an increasingly complex and risky financial marketplace on their own.

“If the CFPB is sidelined from addressing emerging issues like digital payments and induced payment fraud, consumers may lose confidence in emerging technologies and the financial marketplace as a whole,” says Chuck Bell, programs director for advocacy at Consumer Reports. “We are on the threshold of creating a regulatory wild west where there’s no active sheriff on the beat, and the only way to get help is to organize a posse of state regulators or take legal action yourself.”