Inspector General Releases Report On Impact Of CFPB Cutbacks

Changes at the CFPB have caused a backlog of consumer complaints, the CFPB’s Office of Inspector (OIG) said, in a report.

Stop-work orders also resulted in CFPB staff temporarily not performing enforcement, supervision and other functions, but workforce-reduction actions had limited impact on bureau operations because of court intervention, the OIG said.

In addition, cancellations of contracts with third parties resulted in service disruptions that affected the consumer complaint database and other operational processes.

“From February to April 2025, we received multiple congressional requests to review the impact on the Consumer Financial Protection Bureau’s operations resulting from the agency’s recent workforce and contract actions, including stop-work orders, dismissals of probationary and term employees, planned reductions in force (RIFs), and contract cancellations,” the OIG said.

The OIG said it did not assess whether the CFPB actions complied with applicable laws, regulations or policies since that is the subject of pending litigation.

“Moreover, our role in this review was not to second-guess policy judgments by CFPB leadership, past or present, about the appropriate number of CFPB personnel or level of enforcement or other activities conducted by the CFPB—such policy decisions are outside the scope of our jurisdiction under the Inspector General Act,” the OIG said. The OIG added, that, as requested by various members of Congress, the review provides factual information about the impact that workforce and cancellations taken in early 2025 had on the CFPB’s operations, which have been the subject of multiple recent reports.

CFPB officials refused to meet with OIG officials, citing the pending litigation. However, they did provide a written response to the report.

The OIG reported that:

During one pay period in February, employees charged 115,726 hours of administrative leave; that is the equivalent of about 1,447 employees being paid while not working.“

In response to the February stop-work orders, Supervision staff initially ceased all supervision and examination activities, pausing 274 examinations and 189 monitoring events, for a total of 463 supervisory events. Since March 2025, Supervision has resumed some activities, such as closing supervisory events, coordinating with other federal regulatory agencies, and participating in Federal Financial Institutions Examination Council projects.”

In April 2025, the CFPB chief legal officer issued a memorandum outlining the agency’s supervision and enforcement priorities for 2025. The memorandum said that the number of supervisory events should decrease by 50% and that supervision staff should shift 70% of its focus to depository institutions and 30% percent to non-depository institutions. In April 2025, CFPB leadership authorized staff to close certain matters requiring attention that did not align with these 2025 priorities.

Under Section 1013(b)(3) of Dodd-Frank, the CFPB is required to establish a unit that has a telephone number, a website, and a database to centrally collect, monitor, and respond to consumer complaints regarding consumer financial products or services. According to a CFPB official, between February 10 and March 3, 2025, the Office of Consumer Response ceased monitoring and responding to consumer complaints related to consumer financial products and services. The OIG went on to note that according to data provided by the CFPB, as of June 2026 the agency had about 17,100 consumer complaints that require manual routing, of which about 3,800, or about 22 percent, have been pending for more than 30 days.

In response to a draft of the report, CFPB General Counsel Victoria Dorfman defended the CFPB’s actions. “In early 2025, the Bureau needed to pause its work to allow then-Acting Director Vought and his team to thoroughly review CFPB’s activities,” she wrote. “It provided time for the new Bureau leadership to identify and implement much needed changes. The Bureau subsequently took extensive action to correct for the overreach of the prior administration, implement a robust deregulatory agenda, and streamline its bloated operations.”

She said that the Bureau has continued to process consumer complaints efficiently while making extensive improvements to its complaint process. The consumer complaint process has long been plagued by users abusing the system, according to Dorfman. For instance, the Bureau launched two-factor authentication, requiring users who create online accounts to verify both their email addresses and mobile phone numbers, she wrote. She added that the CFPB also plans to implement address validation at the complaint submission step.

The Bureau also is taking a new approach to its supervisory and enforcement work, Dorfman wrote. “The Bureau [will] no longer pursue matters based on novel legal theories and it [will] avoid burdensome duplicative actions,” she said. She added, “Instead of chasing headlines by targeting companies based on dubious legal theories and extortionate penalties, the Bureau now focuses its enforcement on addressing actual harm to consumers and providing them with relief as quickly as possible.”

Dorfman also criticized the OIG’s work. “The Draft Report does not account for the Bureau’s bold and aggressive agenda and the extensive work it has done to correct the misguided approach of the prior administration,” she concluded.