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For a long time, Misty Castaneda had terrible credit. Even though she had health insurance, the hair stylist from Colorado owed a hospital around $20,000 for a $200,000 open-heart surgery in 2010 that had been necessary to keep her alive, she says.
Castaneda’s credit was so bad that she stayed in a bad relationship for more than a decade, she says, because she knew that without her husband’s credit score, she wouldn’t be able to rent an apartment, buy a car, or take out a credit card.
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So when she recently heard that the Consumer Financial Protection Bureau (CFPB) had finalized a rule that would keep medical debt off personal credit reports, she knew she had to advocate on behalf of it. “It would just open the doors for so many people like me,” says Castaneda, now 47 and divorced.
Although the rule keeping medical debt off credit reports was finalized on Jan. 7, it may be on the chopping block as Elon Musk’s Department of Government Efficiency (DOGE) turns its sights to the CFPB. It’s not clear what powers the bureau will retain after Musk and his allies in the Trump Administration are through with it.
Trump has fired the CFPB’s director. Its acting replacement, Office of Management and Budget director Russell Vought, ordered all employees to stop work earlier this week, effectively suspending much of the bureau’s bread-and-butter activities. In an email, employees were told to not approve or issue rules or guidance and that they should suspend the effective date of rules that had not yet become effective, which includes the medical debt rule. Employees were also told to cease any pending investigations and not issue any public communications of any type. Vought said on X on Feb. 8 that he would be notifying the Federal Reserve that the CFPB would not be taking its next funding draw “because it is not ‘reasonably necessary’ to carry out its duties.”
“CFPB RIP,” Musk wrote on X on Feb. 7.
It doesn’t look like the bureau is going away entirely. On Feb. 12, President Trump reportedly nominated FDIC board member Jonathan McKernan to be director of the CFPB. But the Administration’s moves are a massive blow to consumers, advocates say, and will leave holes in enforcement and regulation that could allow companies to take advantage of consumers.
“The CFPB was established to take the side of ordinary people when Wall Street banks and big corporations rip you off, when they tank your credit report, when they push you into foreclosure,” says Lauren Saunders, associate director at the National Consumer Law Center, a nonprofit that works on behalf of low-income consumers. “Getting rid of the CFPB will just let Wall Street banks and corporate predators run amok.”
The White House and DOGE did not respond to requests for comment.
What the CFPB does
The CFPB, which was created in 2010 in the wake of the financial crisis, has three key assignments: it supervises banks and financial institutions, writes rules that protect consumers, and enforces the law. But there are other functions it performs that no other agency can or would do if it were eliminated, consumer advocates say.
The CFPB employs bank supervisors around the U.S., who go into financial institutions periodically to check books and prevent problems from occurring. It enforces 18 consumer financial laws that Congress transferred to the agency when it passed the Dodd-Frank Act, which established the bureau. It runs a complaint database, to which consumers can submit reports of problems with certain companies. The agency has received nearly 7 million complaints from consumers since Dec. 2024.
The CFP also prosecutes companies that it says fail to protect consumers. In December, it filed a lawsuit against the operator of Zelle and three of the nation’s largest banks for allegedly failing to safeguard consumers from fraud. In January, it sued the credit reporting agency Experian for allegedly failing to investigate consumer disputes.
Perhaps most importantly, the CFPB writes rules to help consumers. It recently finalized a rule that would cap overdraft fees from banks, which the bureau said would add up to $5 billion in overdraft fee savings for consumers. In January it finalized the rule that would remove medical debt from people’s credit reports, which it said would remove $49 billion in medical bills from about 15 million Americans’ credit reports. These rules are the product of months or sometimes years of on-the-record discussion, to which anybody can submit comments and try to sway regulators.
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“They have really done a lot in the last six months, and many of those accomplishments are being contested,” says Adam Rust, director of financial services at the Consumer Federation of America, a nonprofit association of nearly 250 pro-consumer groups.
It’s possible the Trump Administration will try to move the responsibilities of the CFPB to another agency in its efforts to cut government spending. In a November post on X, Musk wrote, “delete CFPB. There are too many duplicative regulatory agencies.”
But the CFPB was created precisely because the old system didn’t work, says Julie Margetta Morgan, the associate director of research, monitoring, and regulations at the CFPB in the Biden Administration. “Many of the responsibilities that CFPB had,” she adds, “came from the fact that these other agencies were not adequately protecting consumers.”
How DOGE could neutralize the CFPB
Some of the consumers who might be first affected by the Trump Administration’s moves to limit the CFPB’s power are those like Castaneda, who have medical debts ruining their credit scores, or those who say that banks have charged them too much on overdraft fees. That’s because the rules recently finalized by the CFPB are facing lawsuits from trade associations that the agency, under new leadership, may not defend against, says Rust.
Instead of fighting the suits, the CFPB has instead asked for a pause in the proceedings and has reportedly instructed its lawyers not to make appearances in the matters. The effective date of the final rule on medical debt has now been postponed from March 7 to June 15. But the CFPB could drop its defense of the case before then. On Feb. 12, a group of nonprofit organizations filed a motion to intervene in the medical debt case so that they could continue to defend the rule.
Even some consumers who support DOGE’s cost-cutting attempts are skeptical that the medical debt rule should go. Gloria Austin, a 67-year-old Chicago resident, says her credit score was hit by medical bills from when she contracted shingles—twice—in 2020, when she did not have health insurance. Austin supports efforts to cut back government spending, and says she believes there is a huge amount of fraud and waste that should be eliminated. She’s struggling under the burden of inflation and hopes that cost-cutting in government could lessen her expenses and taxes.
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But she also says the CFPB’s rule on medical debt would help consumers like her who are saddled with bills they can’t avoid. “It was either keep the lights on and buy groceries or pay my medical bills,” she says. Creditors have continued to hound Austin, she says. When she had to buy a car, the only loan she could get had an interest rate near 30%. “No medical debt should appear on a credit report,” she says. “People are struggling enough already.”
In general, consumer advocates say they expect the new Administration to take a much less aggressive approach to holding companies accountable. It could try to drop lawsuits against companies like Experian, or stop looking for new enforcement efforts to bring. “I don’t have a lot of optimism that the CFPB is going to continue to prosecute enforcement actions,” says Saunders, of the NCLC.
Already, visitors to the CFPB’s website, consumerfinance.gov, are greeted with a new error message: “404: Page not found.” An email from TIME to the CFPB’s press office was not returned.
Not the first attack on the CFPB
The CFPB has been under fire before. It was first envisioned by now-Sen. Elizabeth Warren, then a professor at Harvard, and created after President Obama proposed a financial agency to focus on consumer protection in the wake of banks’ role in the financial crisis.
Many Republicans opposed the creation of the bureau, insisting it had burdensome regulations that would hamper consumers’ ability to access credit. When the CFPB opened its doors in 2011, it did not have a director because the U.S. Senate would not confirm President Obama’s appointee. (President Obama used a recess appointment to install Richard Cordray as the agency’s chief.) Some Republicans have been trying to get rid of the agency ever since. In 2015, Sen. Ted Cruz introduced a bill to abolish the CFPB.
One of the biggest challenges to the agency came in a series of lawsuits opposing its statutory authority and funding structure that ultimately reached the Supreme Court. The CFPB emerged from the challenges intact, with one exception. In 2020, the Supreme Court ruled that the CFPB’s director could be fired for cause. That allowed Trump to get rid of former director Rohit Chopra on Feb. 1.
In 2024, the Supreme Court upheld the CFPB’s funding structure, saying it could draw money from the earnings of the Federal Reserve. But Vought appears disinclined to do so. “This spigot, long contributing to the CFPB’s unaccountability,” he wrote on X, “is now being turned off.”
