The Consumer Financial Protection Bureau (CFPB) has terminated its enforcement agreements with U.S. Bank and Apple, ending multi-year oversight requirements for both companies. These decisions are part of a broader trend that has seen the agency dismiss dozens of cases since the beginning of the year, a shift that coincides with significant budget reductions and the possibility of staff layoffs.
According to sources within the agency and external watchdog groups, the rapid closure of these cases reflects a significant change in regulatory direction. The CFPB's actions have raised concerns about the future of consumer protection enforcement in the financial sector.
Key Takeaways
- The CFPB has ended its consent orders with U.S. Bank and Apple, removing future compliance and oversight mandates.
- Since the start of President Trump's second term, the agency has dismissed or withdrawn over half of its inherited enforcement cases.
- The bureau has initiated only two new enforcement actions in the same period, compared to 13 in the first eight months of 2021.
- These changes follow a congressional bill that nearly halved the CFPB's funding, leading to internal warnings of potential staff reductions.
Major Enforcement Actions Terminated
The CFPB recently announced the termination of two significant consent orders. The first involved U.S. Bank, which was ordered in December 2023 to pay a $36 million penalty related to its management of prepaid debit cards for unemployment benefits during the pandemic. The bank was accused of improperly freezing accounts, preventing thousands of people from accessing necessary funds.
The second terminated order was with Apple, which was fined $25 million in October 2024 for its handling of disputed transactions on the Apple Card. Both companies had already paid their financial penalties. However, the original agreements included long-term oversight, with U.S. Bank's set to continue for another three years and Apple's for four.
The termination orders confirmed that the penalties were paid but did not provide a specific reason for ending the ongoing compliance requirements. The documents simply noted that the agency possesses the statutory authority to modify or set aside such orders.
Background on the Cases
The U.S. Bank case centered on allegations that the bank failed to provide adequate customer service and access to funds for recipients of state unemployment benefits. The Apple case focused on the company's procedures for handling consumer transaction disputes, a core function for credit card issuers.
A Pattern of Dismissed Cases
The decisions regarding U.S. Bank and Apple are not isolated incidents. Data shows a clear pattern of reduced enforcement activity at the CFPB since the new administration took office. The agency has dismissed or withdrawn dozens of pending enforcement cases, which constitutes more than half of the active docket it inherited from the previous administration.
"I think it's part of a wider trend that the bureau has initiated since the inauguration, which is to indiscriminately allow the financial services industry to escape any sort of ongoing bureau oversight," said Amanda Fischer, chief operating officer of the nonprofit group Better Markets.
This reduction in existing cases is matched by a slowdown in new actions. In the first eight months under the new leadership, the CFPB has launched only two new enforcement actions. This stands in sharp contrast to the 13 actions initiated during the same period in 2021 under the Biden administration.
Enforcement by the Numbers
- New Actions This Year: 2
- New Actions in early 2021: 13
- Inherited Cases Dismissed: Over 50%
"It's striking, the numbers," Fischer added. "They're not bringing anything new." This decline in activity has led some observers to question the agency's commitment to its enforcement mandate.
Budget Cuts and Staffing Concerns
The shift in enforcement strategy is occurring as the CFPB navigates severe financial pressures. In July, Congress approved a spending bill that significantly reduced the agency's funding. The bureau's funding, which comes from a transfer from the Federal Reserve, was cut from a cap of 12% of the Fed's operating expenses to 6.5%.
Following the budget cut, the agency has warned its employees about potential job losses. An internal email obtained by news outlets stated that the CFPB must evaluate "workforce optimization opportunities" to align with its new funding levels.
The email explicitly mentioned that this evaluation includes "considering a possible reduction in force action." Anonymous employees have suggested that the rush to close existing enforcement cases is directly linked to the anticipated lack of resources and personnel to manage them.
This is not the first time the agency's workforce has been threatened. In April, the administration attempted to fire nearly 1,500 employees, about 90% of the staff, before a federal court intervened and ordered their reinstatement. Fischer of Better Markets commented on the earlier move, stating, "The fact that they tried to fire everyone overnight with little notice, I think, is a tell that they don't want the bureau to exist anymore. It's just clear that this is part of an all-out assault."
Future of Consumer Financial Protection
The combination of terminated oversight, a sharp drop in new cases, and severe budget constraints has created uncertainty about the CFPB's future role as a consumer watchdog. The agency was created after the 2008 financial crisis to protect consumers from unfair, deceptive, or abusive practices in the financial marketplace.
With fewer active cases and the potential for a significantly smaller workforce, the bureau's capacity to investigate complaints and enforce consumer protection laws may be diminished. The recent actions suggest a fundamental shift away from the proactive enforcement posture that has defined the agency for much of its existence.
Neither Apple nor U.S. Bank provided a comment on the termination of their respective consent orders when contacted. The CFPB also did not respond to requests for comment on its broader enforcement strategy.
