Cara Petersen, the acting enforcement director of the Consumer Financial Protection Bureau (CFPB), announced her resignation from the agency on Tuesday. In an email addressed to her colleagues, Petersen expressed strong criticism of the Trump administration's ongoing efforts to dismantle the CFPB, which was established as a vital banking watchdog in the aftermath of the 2008 global financial crisis.
In her email, which has been obtained by CNN, Petersen stated, “I have served under every Director and Acting Director in the Bureau’s history, and never before have I seen the ability to perform our core mission so under attack.” She went on to emphasize that the current leadership of the CFPB has shown a clear lack of intention to enforce the law in a meaningful manner, raising concerns about the agency's future effectiveness.
Since President Donald Trump took office, the CFPB has experienced significant turmoil. The agency has faced multiple attempts at mass layoffs and has made abrupt decisions to dismiss cases against several companies accused of harming consumers. The CFPB has been a primary target of the Trump administration's downsizing initiatives, although many of these efforts have been obstructed in federal court.
The CFPB was created as part of the Dodd-Frank Act, a comprehensive federal law passed in 2010 to address the financial vulnerabilities that contributed to the global financial crisis. Since its establishment, the agency has delivered a remarkable $19.7 billion in consumer relief, helping approximately 195 million people access that relief.
In recent months, the CFPB made headlines by abruptly dropping cases against several major companies, including Capital One, Rocket Homes, and a subsidiary of Warren Buffett’s Berkshire Hathaway. This decision aligns with the Trump administration's more lenient approach to regulation, further complicating the agency's mission to protect consumers.
Less than two weeks into Trump's second term, he dismissed Rohit Chopra, the CFPB director appointed by President Joe Biden in 2021. Since February, the agency's new leadership has been reassessing its operations and staffing levels, with Mark Paoletta, the chief legal officer, stating in a court filing that past administrations had “pushed well beyond the limits of the law.”
In February, the Trump administration attempted to significantly cut back the CFPB's operations by directing its employees to halt activities. However, a federal judge intervened, challenging that directive. By April, the CFPB had issued layoff notices to nearly 1,500 of its 1,700 staffers, shortly after an appellate court ruled that while the agency could reduce its workforce, it could not do so to the extent that it would hinder its statutory functions. Although these mass layoffs have been halted by federal judges, staffers report that their workloads have dramatically diminished.
One enforcement team member, who spoke under the condition of anonymity due to fears of retaliation, expressed frustration over the current situation, stating, “It’s been very frustrating to have active investigations and litigations dropped, as well as negotiated settlements.” They noted that despite being required to be ‘work-ready,’ there is minimal work available, leading to feelings of disillusionment among staff.
Petersen stepped into the role of acting head of enforcement after the resignation of Eric Halperin in February. She conveyed her dismay in her resignation email, describing the dismantling of the Bureau’s enforcement function as “devastating.” She pointed to the thoughtless reductions in staff, inexplicable case dismissals, and the termination of negotiated settlements as factors contributing to the agency's decline.
As the CFPB navigates these tumultuous changes, the future of consumer protection in the financial sector remains uncertain, leaving many to question the agency's ability to fulfill its core mission effectively.
