Trump Administration Reshapes CFPB Into Industry-Friendly Regulator Using 'Ask-Nicely' Approach
Unable to dismantle the Consumer Financial Protection Bureau through courts, Russell Vought shifted to a collaborative strategy that deferred to company self-reporting—a method tested by the Bilt startup, which failed customers again after the CFPB accepted its assurances.
What happened
Russell Vought, acting head of the CFPB under the Trump administration, abandoned efforts to close the agency after federal courts blocked him and instead restructured it toward what he called a collaborative, less aggressive posture toward financial companies. In July testimony to Congress, Vought highlighted Bilt, a fintech startup offering credit cards tied to rent and mortgage payments, as evidence of success—claiming the company fixed problems after the CFPB simply reached out rather than deploying traditional enforcement tools like examiners or subpoenas. Two weeks later, Bilt failed customers again, issuing mistaken debt collection notices that damaged credit scores. Current and former CFPB officials said the agency's lighter approach, which relied on taking Bilt's word that issues were resolved, would have missed problems that the previous investigative playbook would have caught.
Context
The CFPB was created after the 2008 financial crisis specifically to investigate and protect consumers from exploitation by financial companies. Vought's shift from adversarial enforcement to collaborative request-based oversight represents a fundamental change in how the bureau operates, one that leaves the agency's consumer protection mandate to company voluntary compliance. The Bilt case illustrates a concrete consequence: current and former CFPB officials noted the agency could have caught the issues that caused Bilt's second failure had the previous investigative playbook still been in use. This transformation occurred because legal avenues to eliminate the CFPB were closed to the administration, making this restructuring the operative path to reducing the agency's regulatory impact. The stakes concern whether consumer financial protections can function effectively under an administration led by officials who have long opposed the agency's existence.