The Federal Reserve's Office of Inspector General (OIG) reportedly committed to reviewing the Trump Administration's efforts to eliminate the vast majority of CFPB employees and agency contracts on June 6, 2025. This decision comes in response to a letter signed by Sens. Elizabeth Warren (D-Mass.) and Andy Kim (D-N.J.) as part of Senate Democrats' efforts to highlight their concern that recent changes to the agency would prevent the CFPB from being sufficiently equipped to perform its statutorily required duties.
In his response to Sens. Warren and Kim, Acting Inspector General Fred Gibson stated that though his office "had already initiated work to review workforce reductions at the CFPB," the investigation will now be expanded to "include the CFPB's canceled contracts." The OIG operates as an independent watchdog agency for both the Federal Reserve and CFPB and is authorized to examine agency records, interview personnel and refer matters to the U.S. Department of Justice.
Senate Democrats have also received commitment from the U.S. Government Accountability Office (GAO), a similar legislative watchdog agency, to review the CFPB's recent reductions in force (RIFs), as Holland & Knight previously reported. In their reviews, the GAO and OIG had previously committed to determining whether the elimination of nearly all CFPB employees constitutes " an illegal shutdown" of the agency and without sufficient support to perform more than 80 congressionally mandated functions. With the OIG's expanded review, the termination of agency contracts will also be scrutinized for the potential chilling effect on CFPB operations.
While the OIG and GAO are conducting independent reviews of the CFPB's efforts to scale back operations, the CFPB is waiting on the U.S. Circuit Court of Appeals for the District of Columbia Circuit to determine whether a preliminary injunction entered by U.S. District Court Judge Amy Berman Jackson is valid. As previously reported by Holland & Knight, Judge Jackson's preliminary injunction enjoined the CFPB from conducting the type of RIFs that the OIG and GAO are also investigating. Though the D.C. Circuit has yet to enter an order on the matter, the decision will be integral to the CFPB's ongoing and future operations, pending the OIG's and GAO's investigative findings.
Separately, Michael E. Horowitz has recently been appointed to lead the OIG, effective June 30, 2025.
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