The Zombie Regulator
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. “It’s hard to get around if you don’t have a vehicle,” 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 charges—at an annual percentage rate, or A.P.R., of 22.99 per cent—was twenty-four thousand. “I didn’t even know what an A.P.R. was,” 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. “The Seller has assigned this Contract to Credit Acceptance Corporation,” it stated. “This assignment is without recourse.” Traylor didn’t know it, but it was Credit Acceptance that had set the terms of the deal, using a proprietary algorithm. The algorithm didn’t assess her particular financial situation; rather, it calculated how much the company would be able to recover if she didn’t follow through with her payments. The lower the predicted recovery amount, the higher the price.
Credit Acceptance advertised its customer base as “credit challenged Americans” who deserve “trust and respect”—and, of course, loans—“regardless of their credit history.” Yet its business model seemed to depend on those customers’ 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 wasn’t injured, but the Optima was totalled and towed away. She received no insurance money, and Credit Acceptance kept billing her. “The only thing I got in the mail was what I owed them,” she said. She stopped making payments altogether.
In September, 2022, Credit Acceptance sent Traylor a “notice of acceleration,” informing her that she was in default for $15,234.66. (The company’s letterhead included the tagline “We change lives!”) 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. “In my opinion, the company sets up these contracts knowing the borrower’s going to fail,” Goodwin told me. It reminded him of the 2008 global financial crisis—“ ‘Give everyone a mortgage. We don’t care if they default. We’re going to put it into a stock and make a boatload.’ ” In a court filing, he called Traylor’s contract “unconscionable” and “usurious,” 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 “retail installment contracts,” 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. “People are trying to sue me for a car I don’t even have,” she said.
Traylor’s experience with Credit Acceptance wasn’t unusual. In fact, so many borrowers were delinquent on the company’s 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.—an agency created in response to the 2008 crisis. The lawsuit, which New York State also joined, accused Credit Acceptance of making “predatory loans to millions of financially vulnerable consumers” and “setting up consumers to fail.” Many of the loans, the suit went on, “exceed state usury caps.” (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.’s 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 actions—against 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. “I told my friends and family, I might need to change my job,” he said. “Because consumer protection is going down.”
The federal building that once housed the C.F.P.B.’s 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. “How do you spell corruption? E-L-O-N! How do you spell destruction? R-U-S-S!” 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 “are fair, transparent, and competitive.” 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 “woke” institution that targeted “disfavored industries and individuals.” (“I don’t know why he has such a hard-on for the bureau,” a former lawyer there told me.) Three weeks into the Trump Administration, Vought locked employees out of their offices and told them to “stand down” from all work; he sent out hundreds of termination e-mails. Young men from DOGE, who hadn’t 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 appropriations—a structure designed to safeguard its independence.) “Russell Vought illegally fired me twice,” 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 “Democrat inflation disaster.” Members of his party have demanded an end to bank bailouts, like those made after the 2008 crisis, and warned of an increasingly “financialized economy” dominated by hedge funds and private equity. To the extent that affordability and fairness are a priority, “it’s really stupid to go after the C.F.P.B.,” 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 “promote the financial stability of the United States” in the wake of the Great Recession. It enforces more than twenty laws—the Fair Debt Collection Practices Act, the Truth in Lending Act, the Electronic Fund Transfer Act, the Home Mortgage Disclosure Act, the Military Lending Act—and has broad discretion to investigate “unfair, deceptive, or abusive acts and practices.” 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.
These individual complaints guide the bureau’s 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 audits—called supervisory exams—of 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 “fintech” businesses that enable mobile banking, payments, and credit. The C.F.P.B. is the only federal entity with the power to supervise these “non-banks.”
But now, under Vought’s leadership, the C.F.P.B. has become a “zombie regulator,” 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 couldn’t be worse. The Federal Reserve has warned that delinquencies on credit cards and auto loans have reached “levels not observed since the Great Financial Crisis.” 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 “K”-shaped, with the rich getting ever richer and the poor skidding down, mired in the feeling, if not yet the fact, of a recession—what the economics writer Kyla Scanlon has termed a “vibecession.” Every day, there are reports of new crypto rackets and wire-transfer scams. “You can step back from consumer financial regulation, and it’s not a problem until something blows up—and then there’s a contagion,” Neale Mahoney, an economist at Stanford, told me. “We won’t know the harm fully until it’s too late.”
From its founding, the C.F.P.B. tried to distinguish itself from other financial regulators—the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency—which 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 “the cave.” 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 employees’ 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. “I’ve had family and friends who consider themselves conservative who believe in the C.F.P.B. mission,” she told me.
Financial institutions weren’t so sanguine. Banks and credit unions were accustomed to being examined for “safety and soundness” (liquidity, in short), not for compliance with an array of consumer-rights laws. Non-banks hadn’t 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. “unaccountable and unrestrained” for collecting such “massive data.” The following year, the bureau ordered Bank of America to refund more than seven hundred million dollars to credit-card users who’d 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 “ghost accounts” 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 agency’s inaugural director, of causing “significant economic harm” 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 bureau’s 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 didn’t 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 Biden’s 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. “I had a very negative opinion of government and regulators,” he told me late last year, at a coffee shop in Harlem. “I often feel that the status quo has failed us.” He was known as an impatient crusader. One of his advisers described him as the kind of person who at a bachelor party would “help the strippers refinance their student loans.”
Chopra left the bureau in 2015. Three years later, he was appointed to the Federal Trade Commission, which, he said, was “essentially in a coma.” 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. “They watched while the opioid crisis raged. They allowed the for-profit college crisis to completely take over. They watched when subprime mortgages happened,” 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 “a totally moribund agency,” he said. There was “almost nothing being done” to monitor the widespread adoption of fintech apps or “the entry of the big tech companies into payments and banking.”
Chopra increased the enforcement team by fifty per cent and created a technologists’ 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 “turn over information about their products, plans and practices when it comes to payments.” It issued legal guidance on “buy now, pay later” 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 “stacking,” 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 “earned-wage-access” 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 access—up ninety per cent from the previous year. These kinds of fintech products weren’t enumerated in Dodd-Frank; they hadn’t really existed in 2010. But as Nick Hand, an astrophysicist by training and a former bureau technologist, told me, “The C.F.P.B. is responsible for banks, lenders, and payments—and big tech companies have been creeping into that scope.”
Those companies, and their backers, disagreed. “I do think Chopra went overboard,” James Kim, a partner at the corporate-law firm Cooley and a C.F.P.B. enforcement lawyer during the Cordray years, told me. “There 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.” Marc Andreessen, the prominent venture capitalist, went on Joe Rogan’s podcast to complain that the bureau had “terrorized financial institutions” and that it wanted to “prevent fintech, prevent new competition, new startups that want to compete with the big banks.” In January, 2025, Mark Zuckerberg, the C.E.O. of Meta, told Rogan that the C.F.P.B. seemed to have an “underlying political motivation” for probing his company’s advertising practices. “We’re not a bank. What does Meta have to do with this?” 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. “When I was thinking about going to law school, I thought civil rights and civil liberties are the ways that lawyers change the world,” Gupta told me. “But it’s actually these kinds of problems—problems of economic justice, problems of consumer protection and also workers’ rights—that are really where the law’s effects are felt most in people’s daily lives.” Gupta keeps pictures of himself with Nader and Warren above his desk.
At a series of emergency court hearings, Gupta’s 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 bureau’s home page. He made plans to fire the vast majority of the bureau’s employees, and advertised a new “Tip Line” on X: “Are you being pursued by CFPB enforcement or supervision staff, in violation of Acting Director Russ Vought’s stand down order? If so, DM us or send an email.”
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 didn’t let employees do much beyond what his deputy, Adam Martinez, referred to as “closeout duties.” 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. (“We’ve been insanely busy since we took over the agency a year ago,” a C.F.P.B. spokesperson wrote, in an e-mail, contesting this account. “If you were to pay attention to our reports, court cases, etc you would know that.”) Six months into Vought’s tenure, Hardy, the examiner, told me, “I’ve been given one assignment, and that was to close a supervisory action.” Like other federal employees, she was required to list five accomplishments in a weekly e-mail. “I’d just copy and paste: ‘I did not violate Director Vought’s stop-work order,’ ” 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 aren’t allowed to do their jobs. Democrats on the Senate Banking Committee estimate that the bureau’s idleness has cost consumers nearly twenty billion dollars. Trump’s Council of Economic Advisers countered with a paper stating that the C.F.P.B. had “increased consumer borrowing costs” by several hundred billion dollars between 2011 and 2024.
Meanwhile, Vought took five million dollars from the bureau’s budget to pay for his personal security and, in October, bragged on “The Charlie Kirk Show” that he would finish closing down the agency “probably within the next two to three months,” notwithstanding the injunction. Vought repeated Andreessen’s talking points, claiming that the C.F.P.B. “had the DNA of Elizabeth Warren” and wanted to “weaponize the tools of financial laws against basically small mom-and-pop lenders,” despite its historic focus on the largest firms in the country. Last April, in a policy memo laying out “supervision and enforcement priorities,” Mark Paoletta, the bureau’s chief legal officer, promised to cut examinations by half, go easy on non-banks, and investigate unfair lending only when there’s already been “proven actual intentional racial discrimination”—as though a queue of professed culprits were simply waiting to be handcuffed. The bureau would no longer focus on student loans, medical debt, “initiatives for ‘justice involved’ individuals (criminals),” or, in a gift to the tech industry, digital payments and “peer-to-peer platforms and lending.”
Contradictions soon emerged. The policy memo included a promise to focus on “service members and their families, and veterans.” 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 “victim of Chopra’s abuse of power.”) The memo also expressed an intent to step away from potentially “duplicative” work—to 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 isn’t incurred in the same volitional manner as, say, a Nordstrom credit-card balance, the bureau found it “less predictive of future repayment.” This past spring, Vought’s 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. I’d seen the impact myself, when I received a doctor’s bill advising me of new “protections around medical debt” in New York that banned its use for credit reporting, liens, and wage garnishment. Vought’s 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 “one-hundred-and-eighty degree change,” as one employee put it. Advocates were referring to the current bureau as “the evil C.F.P.B.” Two weeks later, during a public hearing on the legislation, a D.C. councilwoman named Christina Henderson acknowledged that the uncertainty could complicate the bill’s future. “Frankly, the C.F.P.B. could not exist in, like, a week,” she said.
A similar question mark hovered over new financial tech. Chopra’s bureau had framed “buy now, pay later” products as credit cards, and earned-wage-access products as payday lenders. These categorizations would mean that, for instance, “buy now, pay later” companies would have to investigate disputes, issue refunds, and provide billing statements. Vought’s C.F.P.B. reversed those interpretations, leaving the states, and consumers, to figure out what rules there were, if any. “The different ‘buy now, pay later’ platforms have different policies on what happens when you miss a payment or whether it’s reported to a credit bureau,” Kimberly Palmer, a writer at the personal-finance site NerdWallet, told me. “That’s why it’s important to dig into the disclosures. But it’s hard to do that, because you’re opting in at checkout—you’re in a time-pressure situation.”
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 state’s usury statutes. “These Big Tech finance apps are finding ways and loopholes,” 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 “from the comfort of my own bed.” The Financial Technology Association, an industry group, is lobbying for a “federal regulatory framework” that would classify earned-wage access as something other than credit or a loan. Penny Lee, the group’s president, told me that it simply wants to “have rules on the books that treat different products differently.” In the meantime, New York’s 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. “Every bank wants to be a tech company, and every tech company wants to be a bank,” 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 “Dodd-Frank is pretty great” T-shirt under her blazer. Frotman spoke with agitated speed. He compared the current glut of delinquencies—and lack of oversight—to the conditions that produced the 2008 financial crisis. Back then, the risk was caused by bundled derivatives backed by crappy mortgages. Now, he said, “a whole new asset class of fintech-driven installment products” was making it shockingly easy to accumulate debt. “Your income isn’t high enough, so we’re going to have your employer give you a payday loan, but just call it earned-wage access. On top of that, you don’t have enough money to pay for groceries, so we’ll just put it on ‘buy now, pay later.’ Then you go to the doctor and you can’t pay for your kids’ medicines, so you put it on a deferred-interest credit card. The list just goes on and on.”
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 Walmart’s fintech partner, Branch Messenger. Nearly all of those efforts are now dead. The C.F.P.B.’s inaction, an official warned in federal court, is likely “planting the seeds for a white-collar financial-crime spree.”
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 months’ notice before a team of examiners inspects call logs, customer records, internal policies, application forms, advertisements, and retail practices. The public doesn’t know who’s 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. “There are a lot of consumers who would later get a check, and they didn’t know why,” Lorelei Salas, the head of supervision during the Biden Administration, told me. In 2023, for example, exams resulted in refunds of “junk fees”—charges for paper statements that never arrived, add-on auto insurance that was still billed after a vehicle was repossessed—totalling 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.’s 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.’s 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 she’d addressed the examiners had been in November, at a meeting to discuss a new “humility in supervisions pledge.” At the start of every exam, staff would be required to read the pledge aloud, promising “to work collaboratively” with the entity being inspected. Now, on the video call, she emphasized that deference was a guiding principle. “An examination is not a fishing expedition,” she said. Future exams, she insisted, would be virtual and short.
The supervision unit had shrunk by thirty per cent. An examiner who was still there told me that he found the call “condescending” and “infuriating.” The examiner is a veteran, and Dorfman’s tone reminded him of being dressed down in the military. “I was raging the whole time,” he said. “It killed the morale”—or whatever was left of it. In 2016 and 2024, the examiner had voted for Trump, angered by the Democrats’ sidelining of Bernie Sanders and drawn to the MAGA promise “not to go to war,” he told me. (In 2020, he voted for the Libertarian candidate, Jo Jorgensen.) But Trump’s real priorities were becoming clear. “They’re cutting taxes for the rich and getting rid of our benefits,” he said. He noted that, though brick-and-mortar banks already have a lot of compliance infrastructure in place, non-banks do not. “All these tech people are friends with Trump,” the examiner told me. “They all went on Joe Rogan and started tweeting about the C.F.P.B. at the same time, and now they’re getting around regulations for their payment platforms.” Trump’s 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 “debanked” 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 fiancée and their cat. He wrote autofiction and applied for jobs, though there weren’t many available: examiners aren’t in high demand these days, in the public or the private sector.
This year, Dorfman has proposed sixty-eight exams—less than half the usual number. The list tracks the bureau’s 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, “which is crazy from a risk perspective,” the examiner said. He worried that the shift to brief, online exams—if the exams happened at all—would make the process less effective. “You don’t get to see the big picture,” he explained. “You miss a lot of trends and patterns.”
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. “We were interviewing the guy who worked there and heard a bunch of rattling in the ceiling,” she said. “I was, like, ‘Oh, is that your A.C. system?’ He’s, like, ‘It’s rats. I’ve told management about them.’ If they didn’t care about their employees, that was a sign that they’re not gonna give a fuck about the customer.” She showed me a stack of old manuals from examiner trainings: “Fundamentals of Mortgage Origination 2,” “Know Before You Owe.” 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 “aware that the C.F.P.B. is kind of moot right now.” The bank wasn’t being reckless, but it didn’t feel the need to invest in more monitoring, either. She missed her work at the bureau. “That was my purpose,” she said. “That’s how I did good in this world.”
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. “In the trajectory of the country, I know my role is limited,” a senior lawyer at the bureau told me. “But 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.”
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.
Wilson’s guests included litigators, a technologist, and a policy expert. One man described his work as increasingly “performative.” He’d recently had to settle a big case on the cheap, and the final agreement undermined “the whole point of the statute,” he said. He and his colleagues were starting to look for other work. “I don’t think anyone thinks the bureau has a master plan,” Wilson told me. If the situation became totally untenable, he would hang a shingle, perhaps starting a solo practice that could “pitch potential enforcement actions to state A.G.s,” 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 general’s office described a burgeoning “C.F.P.B. diaspora.” Wilson’s former boss, Eric Halperin, was re-creating a version of the bureau’s enforcement division at Protect Borrowers, a consumer-rights nonprofit. Still, Halperin told me, “nothing can take the place of what the bureau, with all its different tools, was able to do.”
The next day, Wilson and other members of the enforcement team gathered for the unit’s annual holiday party, held in the community room of a colleague’s apartment building. On the way, they received an e-mail from Michael Salemi, the acting enforcement director:
Salemi was the third enforcement director to resign in less than a year. “He was an incredibly even-tempered person,” Wilson told me. “So for him to finally find it unsustainable to stay was a real kick in the teeth.” 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. Wilson’s phone lit up with a link to a Bloomberg Law article, in which a C.F.P.B. spokesperson said, of Salemi’s resignation, “No longer is the Enforcement Division one of thuggery and unprofessional behavior.” And: “Don’t let the door hit you on the way out.”
At the bar, Wilson chose a song called “The Modern Leper,” by the Scottish indie-rock band Frightened Rabbit. The chorus goes like this:
It was a bit of a “vibe killer,” Wilson admitted. The next morning, he went back to work for more of the same. ♦