The dismantling of the Consumer Financial Protection Bureau will hurt military troops and families who count on the agency's mission to rein in predatory lenders and prevent fraud, lawmakers and veterans advocates say.
The closure of CFBP's offices Feb. 10 and dismissals Wednesday and Thursday at the agency threaten work that is vital to protecting personnel from those looking to take advantage of service members' and veterans' steady income and benefits, said Sen. Tammy Duckworth, D-Ill., and others watching the agency's demolition.
CFPB is an independent federal organization that creates rules for and takes action against financial institutions and businesses to protect consumers from unfair or abusive practices.
Read Next: USS Truman's Nuclear Propulsion System Safe After Ship Collision Off Egypt Coast, Navy Says
In 2023 alone, it investigated nearly 85,000 complaints regarding consumer and student loans, credit, mortgages and payday lending, garnering monetary relief worth $192 million for violations of the Military Lending Act as well as predatory loan regulations and fraud.
But those protections will be upended with the weakening or closure of CFPB, hurting those often targeted by opportunistic businesses, Duckworth said in an interview Wednesday with Military.com.
"We know bad actors come after our service members because of the benefits that they've earned," Duckworth said. "Studies show military men and women are among the likeliest groups for financial crimes after senior citizens, and really the CFPB is the cop on the beat."
Created in 2010 by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the agency was designed to consolidate consumer financial safeguards and oversight that once resided across seven federal agencies. It has an employee base of roughly 1,600, including seven full-time employees in the Office of Servicemember Affairs.
Those employees -- and in fact, all non-union workers at CFPB -- were told Wednesday they no longer have jobs.
Since its inception, CFPB has restored nearly $20 billion to U.S. consumers in monetary compensation, canceled debt and reduced loans. It has cracked down on payday lenders that often charged service members annual interest rates of 200% to 300% prior to enactment of the Military Lending Act, which now caps loan rates at 36%.
It also has worked on behalf of veterans to protect them from education loan facilitators falsely identifying themselves as Department of Veterans Affairs representatives, and made inroads in expunging medical debt from credit reports and curbing junk fees.
But CFPB has been a political lightning rod, with conservative critics saying the agency's regulatory oversight is too broad and stifles financial business practices. They also argue that the bureau undercuts the housing market by overstepping its boundaries on mortgage protections.
Under the first administration of President Donald Trump, CFPB stopped its examination of Military Lending Act-related activities, arguing that it didn't have the authority by law to do those reviews. That capability was restored in 2021 by President Joe Biden but will disappear with the closure of the agency under Trump.
Defenders say the bureau's watchdog mission has bipartisan support that is vital to safeguarding military families. During a hearing before the Senate Committee on Banking, Housing and Urban Affairs in November 2023, advocates said that dismantling the organization would be disastrous to military families and veterans.
"[The Military Officers Association of America] is gravely concerned by the potential weakening of the CFPB. We believe that, without a robust CFPB, service members, veterans and their families would lose a vital defender and the only federal agency mandated to safeguard their financial interests," Cory Titus, now the group's director of government relations for veteran benefits and National Guard and reserve affairs, said in the hearing.
"If CFPB is weakened or eliminated, we will lose the only federal agency that is investigating violations of and enforcing the [Military Lending Act] -- a task that will fall to the Department of Defense," Kelly Hruska, then the government relations director at the National Military Family Association, added in 2023.
In a Supreme Court case, the Community Financial Services Association of America challenged the CFPB's funding from the Federal Reserve after the agency limited the number of payments providers could automatically withdraw from borrowers' bank accounts, a practice that can result in significant overdraft fees.
In its ruling, the Supreme Court upheld CFPB's oversight and rejected the association's argument that the agency's funding was unconstitutional.
On Friday, Billionaire Elon Musk, a Trump adviser and head of the Department of Government Efficiency, posted on his social media platform X, "CFPB RIP" with a tombstone emoji, and the agency's X account is down.
On Saturday, CFPB employees were told to "cease all supervision and examination activity." On Monday, Russell Vought, now head of the Office of Management and Budget, ordered them to not perform any work.
The agency’s website remained online Thursday, however.
The government also maintains a Military Consumer website that provides financial information for service members and their families. Run by the Federal Trade Commission, the CFPB and the Defense Department, it also remains online.
In the Oval Office on Monday, Trump said the CFPB was "set up to destroy people."
"We did the right thing," Trump said.
In a rally in front of the CFPB's offices in Washington, D.C., on Monday, Sen. Elizabeth Warren, D-Mass., vowed to fight the closure of the agency.
"We will fight it out in Congress. We will fight it out in the courts. We will fight it out all across this country -- and I promise you, we will win," said Warren, who was instrumental in creating the bureau in the wake of the 2008 financial crisis.
Duckworth urged military families to speak up, contacting their lawmakers or getting involved with organizations.
"The types of things [CFPB fights against] are fraud in mortgages, small-dollar lending, auto loans, student loan fraud, credit card late fees, bank account overdraft charges, predatory tactics by big banks. ... CFPB is really important because they actually prevent that predatory behavior from happening," Duckworth said.
The CFPB press office did not respond to an email or phone calls for comment by publication time.
Related: The Best Personal Finance Tools and Resources for Military Households
