Washington, D.C. — Cara Petersen, the acting enforcement director of the Consumer Financial Protection Bureau (CFPB), announced her resignation on Tuesday, criticizing the Trump administration’s attempts to undermine the agency. Established as a safeguard for consumers in the wake of the 2008 financial crisis, the CFPB has faced significant turmoil since the current administration took office.
In an email to her colleagues, Petersen expressed her concerns about the agency’s functionality under the administration. She noted that despite having worked under every director since the bureau’s inception, she had never seen such a concerted effort to hinder its mission. Petersen’s departure underscores the tumultuous environment within the CFPB, which has seen attempts to roll back its regulatory power and oversight.
The CFPB was created through the Dodd-Frank Act of 2010 to protect consumers against unfair practices by banks and lenders. Since its establishment, the agency has facilitated approximately $19.7 billion in relief for consumers, aiding nearly 195 million people. However, recent actions by the administration include dropping significant legal cases against corporations previously accused of wrongdoing, signaling a shift towards a more lenient regulatory approach.
The CFPB has faced multiple challenges, including mass layoffs and operational halts. Amidst investigations into corporate misconduct, the agency decided to abandon cases against several companies, including well-known brands such as Capital One and Berkshire Hathaway. Critics argue that this shift reflects a broader reluctance to enforce consumer protection laws vigorously.
Tensions escalated further when the Trump administration attempted to cease all CFPB operations shortly after taking office. Federal courts intervened, blocking efforts to drastically reduce the agency’s staff and functions. This legal tug-of-war has left many agency employees in limbo, with reports indicating that staffers have been left with little work since a partial reactivation in March.
Petersen’s resignation adds to a series of high-profile departures that have characterized the agency’s leadership during this turbulent period. Following her exit, the CFPB faces ongoing scrutiny over its ability to fulfill its mission and uphold consumer rights effectively.
One CFPB staff member, speaking anonymously, expressed frustration over the inaction on ongoing cases and emphasized the significant impact of recent changes on their work. The employee highlighted the challenges of maintaining readiness while facing reductions in caseloads and ongoing investigations that have been shelved.
Petersen’s tenure as acting director began after the resignation of Eric Halperin earlier this year. She noted that the dismantling of the enforcement division has been distressing, with strategic dismissals of cases leaving harmful practices unaddressed. As the CFPB navigates these challenges, the future of consumer protection in the financial sector remains uncertain.
