CFPB Proposes Major Workforce Reduction Amid Ongoing Legal Fight

The Consumer Financial Protection Bureau (CFPB) has outlined a plan to cut more than half of its workforce as part of an ongoing legal battle over the agency’s future.

In court filings, the CFPB said it would reduce staff by roughly 53 percent (approximately 618 employees) bringing total headcount down to roughly 550 workers. The agency is asking the D.C. Circuit Court of Appeals to send the case back to the district court, arguing that the revised plan should allow a previously issued injunction blocking mass layoffs to be lifted.

The proposed cuts would fall unevenly across the agency, with the supervision division—responsible for examining banks and financial firms—facing the steepest reductions (approximately 78 percent). The enforcement division would be cut by about 63 percent, while operations staff would decline by nearly half. The legal division would remain largely intact.

CFPB leadership argues the reductions are necessary to comply with new funding constraints imposed by recent legislation, which caps the agency’s funding at 6.5 percent of the Federal Reserve’s operating expenses (about $466.8 million for fiscal 2026). By comparison, the Bureau spent more than $526 million on personnel in 2025, which officials say makes maintaining current staffing levels untenable.

The agency maintains that it would still be capable of fulfilling its statutory obligations, even with a significantly smaller workforce. It also emphasized in court filings that the revised plan does not contemplate shutting down the agency, a key issue underlying the current litigation.

Critics, however, have disputed this claim, arguing that the cuts would effectively hollow out core functions, particularly supervision and enforcement. They say that this would leave the agency unable to carry out its consumer protection mandate.

The proposal marks a scaled back approach compared to earlier efforts to eliminate up to 90 percent of the Bureau’s staff, which were blocked by federal courts. Still, the latest plan underscores the administration’s continued push to “right-size” the agency, even as judges weigh whether such reductions amount to an attempt to dismantle a congressionally mandated regulator.

The outcome of the case will likely determine not only the CFPB’s staffing levels, but also the broader limits of executive authority over independent financial regulators.