The nation’s top consumer watchdog is getting a major reshaping under President Donald Trump.
On Wednesday, Mark Paoletta, the Consumer Financial Protection Bureau’s chief legal officer, sent a memo to all employees outlining the agency’s new priorities for 2025.
The memo, a copy of which was obtained by Business Insider, stated that the “Bureau will focus on its enforcement and supervision resources on pressing threats to consumers, particularly service members and their families, and veterans.”
“To focus on tangible harms to consumers, the Bureau will shift resources from enforcement and supervision that can be done by the States,” Paoletta wrote.
Paoletta said that moving forward, the CFPB will “deprioritize” areas including oversight over student loans, medical debt, consumer data, and digital payments.
Under former President Joe Biden, the CPFB returned billions of dollars to student-loan borrowers after the agency found that some student-loan servicers engaged in predatory behavior. For example, the CFPB reached a settlement with lender Navient in September over claims the company mishandled payments, giving back $100 million to affected borrowers.
A CFPB employee told BI that these new priorities come at a financially precarious time for student-loan borrowers, especially with the New York Federal Reserve estimating that millions of borrowers are set to default this year due to some protections expiring.
“In the face of this unprecedented financial catastrophe, CFPB has given the student loan industry advanced notice that it will not be watching out for borrowers and it will not hold companies accountable when they break the law,” Mike Pierce, executive director of the advocacy group Student Borrower Protection Center, said in a statement.
Paoletta’s memo also said that the CFPB will focus on getting money back to consumers rather than “imposing penalties on companies in order to simply fill the Bureau’s penalty fund.” The CFPB employee said that supervising companies “is literally the reason the agency was created” and is not something states can do themselves.
This is the latest move in the Trump administration’s efforts to restructure the government and slash the federal workforce. In February, BI reported that CFPB employees were told to “not perform any work tasks,” and the agency has since dropped major lawsuits against companies, including Capital One.
Wednesday’s memo confirmed that supervision — a core part of the agency’s responsibilities over the past decade — will decrease.
The CFPB did not immediately respond to a request for comment from BI.
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