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A massive dismantling of the financial regulator created to protect consumers is underway, affecting everything from auto lending and digital payments to credit cards and credit reports. Two years ago, the Consumer Financial Protection Bureau (CFPB), a federal financial regulatory agency, announced it was forcing Toyota Motor Credit to give consumers back tens of millions of dollars. While selling bundled auto insurance and car-servicing products, Toyota dealers had “lied about whether these products were mandatory” and sneakily included them in contracts without borrowers knowing it, said the CFPB in a press release, citing consumers’ complaints. Even more maddening, when consumers called Toyota to cancel the unwanted add-ons, representatives had been trained to keep promoting the products until the customer asked to cancel three times. Then customers still couldn’t cancel during those calls–they had to take yet another step and submit a written request. Between 2016 and 2021, Toyota funneled 118,000 calls to this hotline. In 2023, the CFPB ordered the company to give customers back $48 million and pay a $12 million fine for these and other violations. But earlier this year the Trump Administration, in its quest to roll back financial regulation, erased that ruling, terminating Toyota’s obligation to pay consumers the $48 million. The same thing happened to a CFPB settlement with large credit union Navy Federal. The financial institution had agreed to give $80 million back to consumers for improperly charging overdraft fees while customers (including active-duty servicemembers and veterans) showed a positive balance at the time of their transactions, an order that has since been reversed. Toyota didn’t respond to Forbes’ requests for comment. In a statement last year, Navy Federal said it would “continue to comply with all applicable laws and regulations, just as we always have and as we believe we did here.” In permanently dismissing 22 CFPB enforcement actions, the Trump administration has caused at least $120 million due to be paid to consumers to stay in companies’ pockets. And if the current administration continues canceling CFPB orders, another $240 million slated to be paid out might not reach consumers either, according to not-for-profit consumer advocacy groups the Consumer Federation of America and Protect Borrowers. At the urging of Trump nemesis Senator Elizabeth Warren, Congress created the CFPB after the Financial Crisis as part of the Dodd-Frank Act, which President Obama signed into law in 2010. The agency was tasked with enforcing financial laws, making regulatory rules and supervising financial services companies–especially non-banks, since they often fell in the gaps between banking and securities regulators. Since its creation, the CFPB has ordered companies to provide $20 billion in relief payments to 195 million consumers and to pay $5 billion in fines. The Trump Administration has brought nearly all of that activity to a halt. This year, the CFPB will likely bring the lowest number of enforcement actions since its inception, and Russell Vought, the director of the Office of Management and Budget and acting head of the CFPB, recently said he aims to shut the entire agency down in two to three months. “Never before in the CFPB’s short history have we seen such an almost complete abandonment of its obligations under the law,” says Eric Halperin, the CFPB’s former enforcement director who left the agency in February. The Office of Management and Budget didn’t respond to Forbes’ emails and phone calls requesting an interview and written responses to questions. Vought’s moves are part of a broader plan to dramatically shrink the size of the government. He seems to view the CFPB as duplicative of other regulatory agencies and hostile toward businesses. Rohit Chopra, the head of the CFPB under President Biden, was often criticized by industry executives and accused of bringing enforcement actions that went beyond the CFPB’s legal scope of power. But former regulators and financial services executives we spoke with for this article all believe that killing off the CFPB will do more harm than good. The short-term winners from the regulatory pullback are numerous. They include megabanks like JPMorgan Chase, Bank of America and Wells Fargo that saw a major lawsuit against them dismissed. The suit accused the banks and Early Warning Services of not doing enough to prevent hundreds of millions of dollars of fraud on Zelle, the money-transfer app they co-own and operate. Last December, Zelle called the suit “meritless.” The big three credit bureaus–Equifax, Experian and TransUnion–now have lighter oversight by a CFPB that has fined them in the past for not doing enough to fix errors on consumers’ credit and tenant-screening reports. And non-banks and fintechs, big and small, that aren’t under the purview of other federal regulators will now likely feel less pressure to comply with the law. Financial institutions have clearly gotten the message that there are fewer cops on the regulatory beat. One example: Financial services companies are investing less in consumer compliance this year than last year, more often opting to just check the boxes of minimum requirements, says a regulatory consultant who works with fintechs and financial institutions. “Nobody is paranoid anymore,” says Tommy Nicholas, cofounder and CEO of fraud prevention and compliance company Alloy. Financial institutions are still investing in compliance, he adds, but on a much longer timeline. The regulatory pullback is coming at a time when consumers are stretched. Inflation has hit middle- and low-income Americans particularly hard. Over the past two years, delinquencies on credit card and auto loans have risen to levels not seen since 2011, and they remain elevated at 12-year highs. Predatory activities are often concentrated on the most vulnerable consumers, and while state attorneys general are stepping up to try to fill the regulatory void, Americans would do well to read the fine print on financial products more closely than ever. Have a story tip? Contact Jeff Kauflin at jkauflin@forbes.com or on Signal at jeff.273. Among regulatory agencies, the CFPB has always operated mostly behind the scenes as a consumer watchdog. It regularly examined the largest financial institutions, sending in auditors to review transactions like foreclosures and interest rate calculations, scrutinize marketing claims and fee disclosures and evaluate responses to consumer complaints. The supervisory group leading those exams made up nearly 500 of the CFPB’s 1,700 employees. Since February, the examinations have apparently ceased. “I haven't seen any indications that they've resumed,” says former regulator Eric Halperin. Vought has tried to fire 1,500 CFPB employees and has ordered staffers to stop much of their work. The firings have been held up in litigation, creating a big, idle workforce that’s still collecting paychecks. The CFPB’s consumer complaints database remains operational, but it’s less effective while the agency is doing little oversight, enforcement or follow-up on the complaints. Typically, the CFPB analyzes complaints to decide what companies and trends to investigate for potential enforcement actions. For example, in 2022, complaints helped the CFPB uncover that Hyundai’s financing subsidiary furnished inaccurate credit reports for 2.2 million consumers, saying many were delinquent on their car loans when they weren’t. The resulting CFPB investigation led the automaker to give $13 million in relief payments to affected customers. Now that the complaints aren’t being used for enforcement actions, companies have less incentive to take them seriously. For instance, while most financial institutions have continued providing timely responses to consumers’ CFPB complaints, some have been responding much more slowly (if at all), according to the publicly available CFPB database. Over the past six months, Dallas debt collector ProCollect, Inc., and Jacksonville-based Professional Debt Mediation responded within 15 calendar days to about 70% of consumers’ CFPB complaints, down from roughly 100% over the same period in 2024. South Carolina auto lender American Credit Acceptance’s timely response rate has fallen from 87% to 57%. (All three companies didn’t respond to multiple emails we sent asking for their comments.) Cryptocurrency wallet and trading platform Abra’s timely response rate has dropped from 78% to just 19%. Abra’s chief compliance officer told Forbes that it had “internal delays in identifying the information for the complaints,” adding that it planned to send more responses within the week and that the current, inactive status of the CFPB hasn’t affected its response rate. Which financial products are most likely to attract predatory practices? Auto loans, payday loans, mortgages, credit repair services and a host of fintech products are prime candidates. Tens of thousands of so-called non-banks offer these products, ranging from payday lender Speedy Cash to Rocket Mortgage, PayPal and Klarna. Institutions like these offer services similar to banks but are not regulated or monitored by the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve or the Office of the Comptroller of the Currency (OCC). Before the CFPB was created, no federal regulator was charged with supervising non-banks. Auto lenders and servicers are an especially big concern, partially because they have a history of questionable practices. Over the past five years, studies have shown that auto lenders have discriminated against Black and Hispanic borrowers. Two years ago, the CFPB sued auto loan servicer USASF for allegedly disabling and repossessing cars illegally. USASF used remote “kill switches” to disable consumers’ vehicles and incorrectly disabled them 7,500 times, leaving borrowers stranded when they weren’t in default or were communicating with USASF about coming payments, according to the CFPB’s lawsuit. The company, which declared bankruptcy a few weeks after the CFPB filed its lawsuit, also double-charged 34,000 customers for insurance, costing them millions of dollars. Low-income Americans with auto loans are struggling to pay them back. In January 2025, a staggering 11% of consumers with credit scores below 660 were at least 30 days late on their payments, a historical high going back to at least 2005, the earliest year for which Equifax and Moody’s data is available. As of September, defaults among that subprime group were hovering at 10.3%, right around the Financial Crisis-era peak of 10.5% observed in January 2009. Recently, Texas-based subprime auto lender Tricolor and auto parts supplier First Brands filed for bankruptcy amid allegations of fraud, which caused Wall Street investors to worry that American consumers–and the broader economy–are in a more fragile spot than many experts realize. In August, despite this shaky economic backdrop, acting CFPB director Vought issued a public request for information on whether to reduce the number of auto lenders under the CFPB’s supervision from 63 companies to as low as 5. If it drops to five, the CFPB’s oversight would only cover the largest lenders, which focus on prime consumers with credit scores above 660. Such a shift would leave subprime lenders unsupervised, though the CFPB doesn’t seem to be doing much supervising anyway. Beyond auto loans, Chi Chi Wu, director of consumer reporting at the National Consumer Law Center, a not-for-profit consumer advocacy group, worries about the quality of the credit reports produced by the big three credit agencies. Their reports feed Americans’ all-important credit scores, which help determine, for example, if people can get a mortgage, auto loan or credit card and the interest rates they’ll pay. Historically, consumers have filed tens of thousands of lawsuits against the credit bureaus alleging errors in their credit reports, according to lawsuit tracking service WebRecon. In January 2025, the CFPB fined Equifax $15 million for not doing enough to investigate and resolve errors on credit reports. An Equifax spokesperson says it worked collaboratively with the CFPB to address the bureau’s concerns through “holistic changes to our technology and processes.” Today, it remains hard to get a clear read on credit reports’ accuracy–some studies have indicated high error rates, while the bureaus adamantly reject such assertions. This year, after a federal court canceled a CFPB rule banning medical debt from credit reports, some worry that credit bureaus will start including more medical debt on people’s credit histories. A spokesperson for credit bureau trade group Consumer Data Industry Association (CDIA) says “there are currently no plans” to do that. Diane Thompson, deputy director at the National Consumer Law Center, thinks Americans with student loans are at risk of having their payments recorded inaccurately, especially due to recent changes in loan servicers and the end of the government’s pandemic-era relief program. Since earlier this year, student loan delinquencies have surged and remained elevated well above their highest levels in over 20 years, according to data from Moody’s and Equifax. Mohela, a non-profit that services federal student loans, has received 4,700 CFPB complaints over the past six months and has only provided timely responses to 40% of them. In a statement, a Mohela spokesperson said the organization “takes every borrower concern seriously and responds to CFPB complaints,” adding that it’s working with the Department of Education’s Federal Student Aid office “to strengthen our responsiveness moving forward.” Thompson also has deep concerns about home equity agreement companies like Boston-based Hometap, which charges fees as high as 20% of a house’s value to consumers pulling cash out of their home’s equity. In mid-January, just before Trump took office, the CFPB published a report saying these services can be hard to understand, are often more expensive than home equity lines of credit and can lead to fees in the hundreds of thousands of dollars. A Hometap spokesperson says homeowner education is “a top priority that we have integrated into every transaction” and that the cost of its products “compares similarly to traditional financing products.” Medical and retail-store credit cards offering deferred interest–where customers pay no interest for a promotional period but are later hit with big, retroactive interest charges if they don’t pay off the full balance–are on the rise, Thompson says. Companies like Synchrony and Bread Financial offer deferred-interest cards. She also believes there are lurking risks beneath the digital payments provided by the biggest U.S. tech companies. “They’re all beyond the purview of regulators,” she says, citing potential issues like the security and sale of consumers’ data, whether fees charged are legal and reasonable and whether the funds go where they’re supposed to. In November 2024, the CFPB issued a rule to start supervising large tech firms offering digital payments like Apple, Google and PayPal, and Congress overturned it this year. Over the past six months, CFPB complaints about PayPal have risen to their highest levels in years, reaching 711 complaints in September alone, with common grievances citing unauthorized transactions, trouble accessing people’s money and suspicions of fraud. A PayPal spokesperson declined to comment. According to the CFPB database, the company provided a timely response to consumers for all but two of those complaints and gave them monetary relief for 87 of them. On top of the many risks to consumers, the near destruction of the CFPB could slow long-term innovation. Companies often want guidance from agencies like the CFPB to interpret complex financial laws, and halting virtually all of the bureau’s work creates massive uncertainty. “Financial services laws are real and are needed for the development of the industry,” says one regulatory consultant. “No one seems to be owning that problem.” More from Forbes ForbesHow Private Equity-Owned Companies Quietly Pocket Class Action PayoutsBy Jeff KauflinForbesAs Trump Rolls Back Federal Financial Regulation, Blue State Regulators Step UpBy Jeff KauflinForbesMoneyLion Accused Of Trapping Borrowers With Misleading Claims And Illegal Loans In Baltimore City LawsuitBy Jeff KauflinForbesSNAP Food Aid At Risk In Shutdown Has A Nearly Century Long HistoryBy Kelly Phillips ErbForbesSecret Fintech Payments Cloud $725 Million Facebook Class Action SettlementBy Jeff Kauflin Got a tip? 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