How Will the CFPB’s Shift in Enforcement Priorities Impact Consumer Protections in the Banking Sector

In 2025, the Consumer Financial Protection Bureau (CFPB) has realigned its enforcement priorities to concentrate on cases involving actual fraud against consumers, especially where victims and measurable damages are identifiable. This change in strategy focuses on real harm to consumers instead of just general rules, aiming to provide direct help to those affected rather than just collecting fines to support the agency.

Mortgages remain the highest priority area, alongside violations related to data furnishing, consumer contracts, and inadequate protections of consumer information. This targeted approach seeks to maximize consumer benefit by focusing resources where harm is clear and verifiable.

Reduction in Supervisory Exams and Shift Back to Depository Institutions

The CFPB plans to reduce the number of supervisory exams by 50%, a move intended to lower compliance costs for businesses and reduce consumer prices. This reduction accompanies a strategic shift back to focusing on large banks and depository institutions, reversing a trend from the past decade where nonbank entities received the majority of examinations.

By concentrating on insured depository institutions with assets over $10 billion, the CFPB aims to streamline oversight and avoid duplicative enforcement efforts with state regulators, fostering a more efficient supervisory environment.

Did you know?
The CFPB was created in 2010 to consolidate consumer financial protection efforts and has undergone several shifts in enforcement philosophy depending on the administration, reflecting evolving priorities in financial regulation.

Emphasis on Consumer Complaints and Remediation Over Penalties

The bureau’s new priorities underscore conciliation, correction, and remediation of harms identified through consumer complaints. Rather than seeking to fill its penalty fund, the CFPB intends to return recovered funds directly to consumers, focusing on tangible relief.

This approach reflects a shift from broad enforcement actions toward more precise interventions that address specific consumer harms, particularly protecting servicemembers, veterans, and their families, who are highlighted as vulnerable groups in the new priorities.

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Narrowed Scope on Fair Lending and Regulatory Changes

The CFPB has narrowed its fair lending enforcement, prioritizing only cases involving intentional discrimination while deprioritizing statistical or disparate impact analyses. This change aligns with broader regulatory rollbacks, including repeals of several Biden-era rules such as the Overdraft Rule and the Payment Apps Rule.

While this may reduce regulatory burdens on financial institutions, experts caution that it could create oversight gaps, especially in detecting subtle discriminatory lending practices. The CFPB’s retreat from expansive enforcement has sparked debate about the adequacy of consumer protections under the new regime.

Potential Risks and Industry Reactions to the Enforcement Shift

Industry groups have largely welcomed the CFPB’s focus on reducing regulatory burdens and targeting clear fraud, viewing it as a move toward efficient and targeted supervision. However, concerns persist about the reduced oversight of nonbank financial companies and the potential for consumer protection gaps.

Federal Reserve Chair Jerome Powell has expressed apprehension that the diminished CFPB activity leaves large banks without sufficient federal consumer compliance oversight, potentially exposing consumers to risks that may not be adequately addressed.