Justice Department Says CFPB Will Be Streamlined, Not Dismantled

Justice Department attorneys reportedly said late Monday (Feb. 24) in court filings that the Trump administration plans to streamline, not dismantle, the Consumer Financial Protection Bureau (CFPB).

The court filings came in a case in which a union representing CFPB workers is seeking a court order that would halt what it says are efforts to destroy the agency, Reuters reported Tuesday (Feb. 25).

In the court filings, the Justice Department attorneys said that the lease of the CFPB’s headquarters has been canceled, and that the agency will require less office space moving forward, according to the report.

However, they added that the CFPB will continue to operate its call center and database for consumer complaints, produce mortgage data and require payments to consumers harmed by corporate misconduct, per the report.

President Donald Trump nominated Jonathan McKernan to be director of the CFPB on Feb. 11, and the Senate Committee on Banking, Housing and Urban Affairs is scheduled to hold a hearing on McKernan and nominees to head a variety of departments on Thursday (Feb. 27), PYMNTS reported.

The nomination of McKernan came one day after he resigned his position on the Federal Deposit Insurance Corp. (FDIC), where he had served on the board since 2023.

It also came at a time when the agency was in flux, with former CFPB Director Rohit Chopra having been fired by Trump days earlier and with the agency’s acting director, Russell Vought, having halted the bureau’s enforcement activity, closed the agency’s office and reported begun firing dozens of staffers.

In the Monday court filings, the Justice Department attorneys pointed to the nomination of McKernan and said, per the Reuters report: “The predicate to running a ‘more streamlined and efficient bureau’ is that there will continue to be a CFPB.”

Thursday’s Senate committee hearing for McKernan’s nomination will serve as a referendum on the CFPB itself, QED Investors’ Amias Gerety told PYMNTS CEO Karen Webster in an interview posted Monday (Feb. 24).

Gerety said: “The first question should be simple: Does Mr. McKernan believe the CFPB should exist?” Gerety added that this cuts to the heart of criticisms that the agency oversteps its boundaries.