It’s clear the actions undertaken by President Trump’s second administration are going to reshape Americans’ finances in myriad ways. And one less flashy part of his federal government overhaul — banking deregulation — is worth paying attention to.
As of now, the only federal agency that explicitly monitors banks and other depository institutions for abusing consumers is on life support. The Consumer Financial Protection Bureau cracked down on everything from junk fees to the withholding of credit card rewards before it was effectively gutted by the Trump administration — a move that’s left a wide regulatory hole and sent consumer advocates reeling.
“The cop on the beat is gone,” said Chris Fasano, an attorney who was fired from his position at the CFPB last month amid DOGE's attempts to dismantle the bureau. “There's no one to monitor these credit card companies, mortgage companies, student loan companies. And when they cheat the American public — and they do — there's no one there to stop them and to return that money to the American public."
Since being signed into law in 2011, the CFPB has recovered more than $19.7 billion in consumer relief payments for an array of violations from banks and financial institutions: things like hidden fees, wrongful foreclosures, erroneous policy cancellations and other potentially illegal conduct.
The agency was created after the Great Recession to patch a regulatory hole in how the federal government policed financial institutions. The Federal Trade Commission has long had a consumer protection division and has operated under the mandate to protect consumers from “unfair or deceptive” business practices. The CFPB’s mandate, though, takes things one step further, empowering the agency to correct and often seek compensation for “unfair, deceptive, or abusive practices” of banks.
“We use that all the time,” Fasano told Salon of the mandate. “There are so many practices where these companies are just skirting the line of statutory regulatory compliance, but ultimately still trying to take advantage of consumers.”
Part of what gave the CFPB such sharp enforcement teeth was its consumer response team, which last week was ordered by a federal judge to return to work after DOGE sent them home. The team monitors the CFPB’s consumer complaint database “very closely,” Fasano said, tracking similar complaints filed against the same institution, monitoring trends and eventually bundling those complaints into an examination or investigation.
“There's nothing quite like that consumer complaint database,” Faraso told Salon. Without it, he said, “people are gonna be left to their own devices. They're gonna be stuck bringing their own case.”
Ira Rheingold, executive director of the National Association of Consumer Advocates, agreed. “The available, immediate remedies for people who feel they've been treated unfairly will be extremely limited by the fact that the CFPB public databases and response team just aren't available,” he told Salon.
Only Congress can eliminate the CFPB, and some of Trump's efforts to shut it down have been halted by the courts. Even a less ambitious goal of weakening the agency could lead banks to feeling emboldened to “take advantage, because they no longer have to comply with the law," Rheingold said.
But there are things consumers can do to protect themselves — starting with being more aware of how the changes could affect their wallets.
How CFPB rules protected consumers
Overdraft fees. A CFPB rule that would’ve lowered the average overdraft fee charged by banks from as much as $35 to between $3 and $14 is in jeopardy. The GOP-controlled House Financial Services Committee voted this month to repeal the rule, and similar legislation has been introduced in the Senate.
Junk fees. The CFPB has cracked down in recent years on junk fees charged by banks. In 2022, the CFPB levied a record $3.7 billion in penalties and redress against Wells Fargo for applying junk fees and interest charges on customers’ auto and mortgage loans, among other alleged violations. A weakening of the CFPB’s authority could lead to limited enforcement in the future.
Resolving consumer complaints. The CFPB's response unit, created to enforce consumer complaints against their banks, assists people "with their financial institution, with a bank, with a payday lender, with a mortgage company, with a car finance company," Rheingold said.
The CFPB also enforces discrimination laws in lending practices, and it requires banks and credit unions to notify consumers ahead of time if the terms of their accounts will change.
Enforcement actions. In 2023, the CFPB ordered Bank of America to pay more than $250 million for a list of alleged violations. Over several years, per the CFPB, the bank was “systematically double-dipping on fees imposed on customers with insufficient funds in their account, withholding reward bonuses explicitly promised to credit card customers, and misappropriating sensitive personal information to open accounts without customer knowledge or authorization.”
Earlier this year, the CFPB sued Capitol One for hawking a savings account that allegedly offered one of the “best” and “highest” interest rates in the nation, only to freeze those interest rates at a lower level “while rates rose nationwide,” costing customers $2 billion in owed interest payments.
That suit was dropped after Trump took office, along with a slew of other enforcement actions the CFPB was pursuing against financial services companies like Rocket Homes, Vanderbilt Mortgage and Finance and Pennsylvania Higher Education Assistance Agency.
What consumers can do
Without the CFPB, American consumers have few options for recourse from financial harm caused by their banks and financial institutions, experts told Salon — such as if they’ve been charged hidden fees, had an account wrongly closed or are facing interest rates on a loan or payment that wasn't disclosed when they took out the loan.
Consumers can opt out of overdraft fees or switch to an account that doesn't charge them. Banks often offer text or email alerts letting consumers know when their account balances are low.
Experts also recommend these steps:
Review your accounts. With less enforcement around things like hidden fees, they advise consumers to scan their bank account charges and transactions on a regular basis, as well as their credit card interest rates.“I would be looking at my bank accounts more closely. I'd be looking at all my transactions more closely,” Rheingold said. “I'd be looking at my credit card statements more closely.”
File a complaint. Experts say it's still a good idea to file a complaint with the CFPB, even if the agency is barely alive. Consumers can also report a claim to their state’s consumer complaints agency or with the FTC's consumer complaints division, as well as with the company accused of committing the violation.
Read the fine print. In the same way that the Food and Drug Administration mandates that companies print nutritional facts in clear language, the CFPB has enforced similar standards for the language banks use when issuing any kind of lending product. But that enforcement will no longer exist, experts said. “If somebody approaches me about a loan or some form of credit, I would look very closely at those terms,” Rheingold said.
If you know a lawyer or someone who works in finance, it’s not a bad idea to have them look over the terms of any new financial product you’re considering: a mortgage, a line of credit, a new bank account or even how your credit card’s rewards points are being applied.
Advocate for yourself. Bobbi Rebell, a certified financial planner at CardRates.com and the author of several personal finance books, said in the absence of the CFPB’s enforcement authority, consumers could benefit from “being their own advocate.”
“It's a great time for a self audit,” Rebell said. She encouraged consumers to review their regular bills and credit card statements, and look for any unrecognized charges or fees. Setting up alerts on accounts for new charges is a good idea, she said.
Consumers should call their banks if they see something suspicious, Rebell said.
“Your credit card company is going to be there to advocate for you if you get a charge that's fraudulent, right?” she said. “Don't forget that.”
