The immediate future is uncertain for the Consumer Financial Protection Bureau, and it might experience downsizing and less regulatory enforcement, but will eventually “rise from the ashes,” one of the agency’s founders predicted during Bank Automation Summit 2025 on March 4 in Nashville, Tenn.

“It looks really scary from the news, like they’re going to eliminate the CFPB, and will they get rid of all the people,” said CFPB founding member Jim McCarthy, who is now chairman of consultancy firm McCarthy Hatch.  

“The CFPB is still there, they are just ‘pens down,’” he said. 

The Trump administration will “stop some of the activity that took place after August 2024” and pull back on the using the enforcement lever of the agency, instead using the supervisory and examination lever more, McCarthy said.

Using the examination lever will give financial institutions an opportunity to repair mistakes before being hit with a big penalty, he said. Downsizing will bring the CFPB to a place where it can only carry out directives under its direct purview, McCarthy said. 

“They will clear as much as they can, and then they will slowly re-staff up to accommodate what they are going to have to do, which is examine the marketplace,” McCarthy said. 

Reversing course 

The CFPB on March 4 rolled back its lawsuit against Zelle, filed in December 2024. The suit claimed the payments channel — along with its founders JPMorgan, Bank of America and Wells Fargo, among others — had not done enough to protect consumers from fraud. 

JPMorgan hit back at the bureau, alleging regulatory overreach, a spokesperson previously told Bank Automation News. 

On Feb. 27, the CFPB dropped its lawsuit against Capital One, which had been filed Jan. 14 , claiming the $486 billion bank had misled its consumers about savings account options, resulting in financial losses totaling $2 billion. 

Follow coverage of Bank Automation Summit 2025 at finainews.com.