The Trump Administration’s Plan for Protecting Consumers? Politely Ask Companies to Behave.

In July, Russell Vought, the acting director of the Consumer Financial Protection Bureau (CFPB), testified before the Senate Committee on Banking, Housing and Urban Affairs. Vought claimed that under his leadership, the CFPB had evolved its approach to dealing with banks and financial companies accused of exploiting consumers. Having previously attempted to dismantle the bureau, Vought now aimed to make it more cooperative and less adversarial towards industry.

At the CFPB, Vought's initial actions included mass layoffs, cuts to funding and an attempt to terminate the lease of the bureau's headquarters. However, federal courts blocked his attempts to close the CFPB. Instead, Vought switched tactics, hoping to focus on deregulation and collaboration with financial companies.

To demonstrate the success of this new approach, Vought named Bilt, a startup offering credit cards for rent and mortgage payments, as an example. The CFPB had reached out to Bilt promptly after a critical transition led to customer confusion and financial stress. Vought claimed that before the process became adversarial, Bilt had fixed its issues.

However, Bilt's troubles resurfaced two months later, with cardholders receiving incorrect debt collection notices and credit score drops. This was the second major issue in six months, and the CFPB was absent when consumers sought answers.

Current and former CFPB officials argue that the bureau's new approach might not protect consumers effectively. The Bilt case raises a larger question: if the Trump administration cannot eliminate the CFPB, what will become of it under Trump officials like Vought, who have long doubted its necessity?