America’s top consumer financial watchdog has spelled out its priorities under the Donald Trump era, including a dramatic cut to supervision and a shift away from financial technology firm oversight.

The Consumer Financial Protection Bureau said it will slash the number of supervision “events” by 50% and leave other enforcement actions to states, according to an email to staff seen by Bloomberg News. The move will “avoid the ever-increasing number of supervisory exams, which are multiplying the cost of running businesses and raising consumer prices,” it said.

The agency will also shift its attention back to banks rather than non-deposit taking firms like fintechs and digital payment companies, according to the email sent by Chief Legal Officer Mark Paoletta, a Trump appointee. The goal is for 70% of the bureau’s supervision to focus on banks and other deposit-taking firms — which was the status in 2012 — compared to less than 40% now, it said.

A representative for the agency didn’t immediately respond to a request for comment.

The agency’s fate has been in doubt since Trump took office, swiftly defanging the regulator by pausing new regulations and pulling a slew of Biden-era lawsuits. The incoming CFPB director Jonathan McKernan pledged to “right-size” the agency in late February, arguing it has little accountability to Congress and the President. The changes have been met with both applause and criticism, with some seeing it as a green light for scams and predatory activities.

In the email, the agency said its focus will be fraud against consumers, with mortgages the highest priority as well as targeting fraudulent overcharges and fees. It will deprioritize areas such as medical debt, student loans, consumer data and digital payments, it said.

The main aim will be getting money back directly to consumers, rather than on penalizing companies to replenish its penalty fund, according to the email.

The consumer watchdog, established in the wake of the 2008 financial crisis, picked up its regulatory and enforcement speed under the Biden administration. Among its higher profile cases were a lawsuit against Capital One Financial Corp. and another targeting banks including JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. for allegedly rushing out a peer-to-peer payment network that allowed fraud to proliferate. Those were all dropped in recent months.

Paoletta said the bureau will respect the regulatory remit of other agencies and stay within its statutory authority — to oversee banks only as it applies to protecting consumers. For example, it won’t bring cases against mergers and acquisitions “just because regulated entities are involved,” Paoletta wrote.

The CFPB will also not facilitate “unconstitutional racial classification or discrimination in its enforcement,” according to the email. It specified that it would not bring cases on redlining solely based on statistical evidence or “stray remarks that may be susceptible to adverse inferences.”

The consumer watchdog had been essentially shuttered since early February, when Trump administration officials began suspending its work overseeing financial companies and closing its Washington, DC, headquarters.

— By Paige Smith (Bloomberg News)