By Dylan Tokar

John Thompson had been working at the Consumer Financial Protection Bureau for over a decade when he and his colleagues were abruptly ordered to halt work. It was February, and the Trump administration was back in charge.

In the days that followed, the president's pick to temporarily lead the federal government's consumer financial watchdog, Russell Vought, quickly moved to shut the agency's offices and dramatically slash its staff. At home, Thompson, 48 years old, soon found himself in a state of forced inactivity, despite continuing to draw a paycheck.

"I'd log on, check my email, make sure I did my mandatory training, and then I would go work in the yard," said Thompson, an attorney who spent years at the bureau investigating predatory payday and auto title lenders.

Ten months later, the CFPB and its employees remain locked in limbo, with much of its prior work having fallen by the wayside. The mass layoffs were halted by courts after the employees' union sued, and the case remains pending before a Washington, D.C., appeals court. Meanwhile, the bureau is spending hundreds of millions to pay for a workforce that mostly sits idle. It could be months before a resolution determines the CFPB's future.

The brainchild of Sen. Elizabeth Warren (D., Mass.), then a Harvard professor, the CFPB was created in the aftermath of the 2008 financial crisis to protect consumers from abusive financial practices. Under its previous directors, the agency has fined big banks like Wells Fargo and Bank of America for unfair or illegal fees, targeted debt collectors for abusive phone calls and investigated credit-scoring companies for misleading consumers.

The CFPB's very existence has long angered Republicans, who have accused the agency of overreach and introduced numerous bills to dismantle or curb it. The financial industry also has sued to stop its work, challenging its rules and arguing against the bureau's constitutionality.

None of those efforts to rein in the agency have gotten as close as Vought, a budget hawk who is co-author of Project 2025, a controversial conservative policy blueprint to reshape the federal government.

The campaign to dismantle the CFPB is in line with the Trump administration's priorities to reduce staff and funding across the federal government. But the speed and intensity of disruption has been especially pronounced at the CFPB.

Vought appears to be planning to shrink the agency to a skeleton staff of 200 from about 1,700. Meanwhile, uncertainty around the CFPB's future has taken a toll. Head count has dwindled to about 1,300, with some voluntarily leaving the agency for more stable ground.

Other employees interviewed by The Wall Street Journal said they were holding out for a resolution to the legal battle, either out of a sense of loyalty to its mission or because they hadn't found another job yet.

A cop pulled off the beat

In the aftermath of Vought's stop-work order, employees took to group messages and their union's Slack channel to share whatever information they could about what was happening.

With little communication from the agency's new politically appointed leadership, much of what was shared was speculation, employees said.

In court, lawyers representing Vought have said the Trump administration intends to fulfill the CFPB's legal mandates with a slimmed-down staff. But on a podcast in October, Vought described the CFPB as a weaponized agency and said he expected to have the bureau closed within two to three months. The acting director has refused to replenish the CFPB's budget, and officials say funds will run out by early next year.

The looming budget shortfall has raised questions about how the Trump administration plans to achieve one of its only clear goals for the bureau: Undoing many of its past actions.

In the weeks after Vought's arrival, Trump officials moved to dismiss several cases brought by the CFPB under its former director, Rohit Chopra, a Biden appointee.

In one, against Vanderbilt Mortgage & Finance, a Berkshire Hathaway-owned lender for mobile home buyers, the bureau had accused the firm of giving loans to borrowers it knew couldn't repay them.

The case, filed two weeks before Trump's inauguration, had been three years in the making, said Thompson, one of the attorneys who worked on it.

Vanderbilt Mortgage said in a statement that it appreciated the CFPB's decision to dismiss the case, which it said was based on unfounded claims and a mischaracterization of established lending practices. "Vanderbilt's practices are responsible, transparent, and centered on helping individuals and families achieve the American dream of homeownership," the company said.

The CFPB has since moved to dismiss or rescind more than 40 of the bureau's past enforcement actions. Last month, its leadership internally announced plans to transfer the bureau's enforcement function to the Justice Department.

Regulatory rollback

Many of the limited number of CFPB employees who are actively working are engaged in rolling back the agency's existing regulations and policy positions, employees said.

After initially canceling a contract needed to process consumer complaints about banks and other financial institutions -- one of the CFPB's congressionally mandated duties -- acting leadership has said in court filings that complaints processing is back up and running.

The function is seen as one of the bureau's most important, providing an early warning system for systemic problems and a way for consumers to resolve issues with lenders.

More recently, CFPB leadership said it would restart exams of banks, mortgage companies and other lenders. The exams function as regular checkups of financial institutions, and allow regulators to point out or escalate potential issues. Now, before each exam, staff will be required to read a "humility pledge."

In a press release outlining the new policy, Trump officials said the exams were previously done with unnecessary personnel and with the "thuggery pervasive in prior leadership."

"They will now be done respectfully, promptly, professionally, and under budget," the release said.

In September, Thompson finally left the CFPB for a job at law firm Hausfeld. "I thought I might die at my desk here. Happily. With no regrets," he told colleagues in a farewell email.

In an interview, Thompson said he ultimately decided it would be better to pursue the work he loved doing elsewhere. "There are plenty of [state] attorneys general out there who want to go to war against bad actors in this industry, and my hope is that they'll hire me to do that."

Write to Dylan Tokar at dylan.tokar@wsj.com

(END) Dow Jones Newswires

December 07, 2025 07:00 ET (12:00 GMT)

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