How the Trump Administration’s Attacks on the FTC and CFPB Put Everyday Americans at Risk
- Brian Page
- 5 days ago
- 7 min read
Updated: 4 days ago
For most families, the systems that protect us from fraud, predatory lenders, identity thieves, and abusive corporations operate quietly in the background. We rarely think about how many guardrails exist between our household finances and the larger forces that can destabilize them. These protections work like airbags in a car. They are rarely visible, but in a crisis, they are the only thing cushioning us from disaster.
Over the past several months, however, those airbags have been deliberately weakened. The Trump administration has launched a series of sweeping actions aimed at limiting, hollowing out, or dismantling the nation’s most important consumer protection agencies: the Federal Trade Commission and the Consumer Financial Protection Bureau. These moves are not bureaucratic details. They reach directly into the financial lives of everyday families.
As a past Visiting Scholar with the Consumer Financial Protection Bureau, I am particularly alarmed by what is occurring. This post explains what is happening, why it matters, and how households can stay vigilant as these protections change.
The Agencies That Protect Consumers Every Day
The Federal Trade Commission is tasked with protecting the public from deceptive or unfair business practices and from unfair methods of competition. That mandate is clear and consumer centered. It includes policing fraud, monitoring deceptive advertising, preventing identity theft, enforcing rules against monopolistic behavior, and educating the public about scams. It touches the basic transactions of daily economic life. When an identity theft ring is shut down, when a deceptive subscription trap is outlawed, when a company is forced to stop misleading consumers, the FTC is doing its job.
The Consumer Financial Protection Bureau was created after the 2008 financial crisis exposed how easily consumers could be harmed by hidden fees, abusive lending, deceptive terms, and complex financial products that most families did not fully understand. Its mission is to ensure that markets for financial products work for consumers and for responsible providers.
In practice, the CFPB supervises banks and lenders, investigates misconduct, writes rules to prevent abusive practices, handles consumer complaints, and returns ill-gotten gains to families when companies break the law.
These agencies are not optional features of a healthy economy. They are essential infrastructure. When a mortgage lender hides predatory conditions in fine print, when a credit card company designs a fee structure that traps consumers, or when a payday lender targets financially fragile households, these agencies step in. They make the financial marketplace safer, fairer, and more transparent.
The Trump Administration’s Moves to Erode Consumer Protection
The first major action involves the FTC. On December 8, 2025, the Supreme Court heard arguments in Trump v. Slaughter, a case about whether the president can fire FTC commissioners without cause. Independent agencies have been shielded from such political interference for nearly 90 years, but a majority of justices appeared open to overturning that precedent. If the Court rules in Trump’s favor, the FTC would no longer be independent in any meaningful sense. Its decisions could shift according to political loyalty rather than consumer protection needs.
The second major action concerns the CFPB. In November 2025, the administration declared the agency’s funding structure unconstitutional and ordered it to operate only until its existing reserves are exhausted. According to reporting from Politico, those reserves could run out as early as 2026. Agency staff have reportedly been instructed to prepare for layoffs, project cancellations, and a suspension of enforcement activity.
These actions are part of a broader effort to weaken what it called the country’s top consumer watchdog. The administration appears committed to reducing its size, limiting its authority, and potentially dissolving key functions.
Taken together, these efforts have the same end result: fewer protections for consumers and less accountability for corporations and financial institutions.
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Why These Moves Put Households at Real Risk
Weakening the FTC and CFPB does not lead to a neutral marketplace. It leads to a marketplace where predatory actors face fewer consequences and have far fewer reasons to behave responsibly. Historically, when enforcement declines, scams become more common, deceptive financial offers proliferate, and aggressive debt collection practices increase. Hidden fees grow more profitable. Loan terms become harder to understand. Data misuse becomes easier to conceal.
And we now have a clear understanding from experts about who will be harmed first.
When asked which categories of consumers will be hit earliest and hardest if the CFPB is defunded or gutted, Erin Witte of the Consumer Federation of America offered a sobering warning. She noted that we are already seeing the Trump-led CFPB abandon or harm military families, car buyers, victims of predatory lending, older Americans, consumers with disabilities, and victims of fraud. She added that the most vulnerable consumers will be low-income individuals, people living in states where the attorney general does not prioritize consumer protection, and the millions of Americans who were supposed to receive refunds from companies that stole from them but were effectively pardoned by this administration.
Her bottom line was blunt:
“Would-be cheats and fraudsters are getting the message over and over again that this administration is not going to hold them to account and that violations of law are rewarded, not enforced.”
This is exactly what happens when watchdog agencies are weakened. The harms do not unfold evenly. They fall first and hardest on those with the least power, the least political influence, and the fewest financial options.
There is also a broader economic consequence. Consumer protection agencies help maintain trust. They keep markets functioning fairly. When the rules are no longer enforced consistently, responsible businesses are undercut by irresponsible ones. Competition becomes distorted. Consumers become more hesitant and less confident. The entire marketplace suffers when accountability disappears.
What’s at Stake if These Agencies Are Weakened Further
The CFPB has historically returned billions of dollars to defrauded consumers. It has taken action against mortgage servicers who misled homeowners, against credit card companies that charged illegal fees, and against student loan servicers that deceived borrowers. It has set clearer rules for mortgages, payday loans, and credit card disclosures. It has created systems that allow consumers to submit complaints and receive help. Weakening or shutting down the CFPB dismantles those protections.
The FTC’s scope is vast. It monitors deceptive advertising, stops illegal robocall operations, investigates monopolistic behavior, and fights identity theft. It enforces rules that keep competition fair and that stop companies from manipulating or exploiting consumers.
But the independence of that enforcement is now in jeopardy.
When asked how worried we should be about political interference in FTC decision making if Trump v. Slaughter succeeds, Erin Witte emphasized the enormous risk to families. If the FTC is no longer independent, she cautioned, it becomes particularly vulnerable to corruption because its core job is to hold powerful interests accountable. She underscored that the FTC has blocked harmful mega mergers involving tech giants, grocery chains, and oil companies—moves that protect Americans from higher prices and fewer choices.
Her warning was stark:
“If a president is allowed to fire his critics and appoint his cronies to the FTC, billionaires will have a green light to game the system.”
She also pointed out that the same danger applies to the Consumer Product Safety Commission. Without independence, politics could override safety, leaving families with no assurance that children’s toys are free of toxic chemicals, that cribs are built safely, or that clothing meets fire standards. In other words, the risks go well beyond finances. They reach into the basics of physical safety inside the home.
The consequences play out in real, practical situations. A retiree may lose savings to a scam with no agency aggressively pursuing restitution. A couple purchasing their first home may face hidden mortgage terms that would have been illegal under existing rules. A family trying to consolidate debt may unknowingly sign onto a high-fee product designed to trap them. Without strong enforcement, the burden shifts from corporations to consumers, who are far less equipped to manage or challenge wrongdoing.
What Could Happen Next
There are several likely paths forward. The Supreme Court could grant the White House full authority over the FTC, leading to political turnover inside an agency that was designed to be insulated from precisely that kind of pressure. If the CFPB runs out of funding, it may cease formal supervision of lenders and credit card companies and stop taking enforcement actions. Even without a formal shutdown, gradual erosion through attrition, budget limits, and leadership pressure could leave both agencies functionally weakened.
No matter which scenario unfolds, consumers are exposed.
What Families Can Do Now
Even as national institutions shift, families can take steps to protect themselves.
State agencies still provide support and often pursue enforcement actions independently. Consumers can lean on state attorneys general, local consumer affairs offices, and nonprofit financial advocacy groups.
Families can also pay closer attention to contracts and loan terms. That includes reading the fine print, asking lenders to explain unclear fees, and seeking multiple offers or second opinions before committing to financial products.
Filing complaints still matters. Even if federal agencies slow down, documented complaints build a record that can support future enforcement. Complaints also help state regulators and nonprofit watchdogs identify harmful patterns.
Finally, voters can press Congress to pass legislation that stabilizes consumer protection regardless of who occupies the presidency. Long term, durable safeguards require action that cannot be undone through administrative orders or budget maneuvers.
At the moment of writing this post, CNBC announced another attack on consumer protections in an exclusive. Details have yet to be released. Here is what CNBC can say:
Treasury Secretary Scott Bessent is proposing a major change in how the government approaches financial regulation and stability, CNBC has learned in a letter set to be released Thursday, Bessent will recommend altering the approach of the Financial Stability Oversight Council. Whereas the agency’s focus had been tightening regulations and oversight of the institutions it oversees, the new plan will switch that, and push for looser regulation and a freer approach.
Read the full article on CNBC: Bessent to propose major overhaul of regulatory body created from financial crisis
Wrapping It Up
Consumer protection is not an abstract political topic. It is the foundation that keeps families safe as they navigate mortgages, credit cards, student loans, online marketplaces, medical bills, and everyday financial decisions. The FTC and CFPB were created because consumers needed guardians against powerful interests with the resources and incentives to exploit confusion and complexity.
The Trump administration’s recent actions place these safeguards at risk. If these efforts succeed, everyday Americans may find themselves navigating a far more dangerous financial landscape with far fewer protections and almost no accountability for the institutions that harm them.
When watchdogs lose their teeth, consumers lose their shield. And families pay the price.