By Douglas Gillison, Nupur Anand, Pete Schroeder and Isla Binnie
(Reuters) – At a JPMorgan townhall meeting on Wednesday, CEO Jamie Dimon was asked whether the Trump administration’s decision to abruptly stop work at the Consumer Financial Protection Bureau (CFPB) and question its existence was good news for the industry.
Dimon told his employees that it was hard for the bank when “policies flip back and forth” and that he preferred consistent policies. The CFPB had some good consumer protection rules, especially when it came to areas like payday lenders, he said, according to a recording of the meeting that Reuters reviewed, which has not been previously reported. Still, he was not mourning the dismantling of the agency.
“The only good I’ll say about the CFPB is there are consumer protection rules that are good,” said Dimon. He added that the agency had “massively overstepped their authority” and used an expletive to describe the former CFPB director, Rohit Chopra, a Democrat who led an aggressive enforcement campaign against the industry. JPMorgan was among three banks the CFPB sued in December, alleging “widespread” fraud on the Zelle payment service.
JPMorgan declined to comment. A spokesperson for Chopra declined to comment.
Established in 2010 to protect consumers after lax mortgage rules and other shoddy industry practices led to the financial crisis of 2008, the CFPB has been reviled by conservatives and the industry, which has accused it of overreach and overzealous enforcement actions.
Even so, its abrupt undoing over a weekend by the Trump administration, including by the Elon Musk-led Department of Government Efficiency (DOGE), is causing upheaval among those it regulates, according to half a dozen people who either advise or work at banks or financial technology firms regulated by the CFPB.
The sudden halt of work has a swath of consequences: it leaves much of consumer finance, from mortgage companies to payment apps, unsupervised, and removes a venue where consumers could file complaints about their providers. It also leaves many investigations hanging in the balance, according to the industry advisers as well as several current and former CFPB staffers.
In the industry, which has had a flurry of conversations to assess the impact of the CFPB’s neutering, concern is emerging that a patchwork of state regulators could take on issues the CFPB had led, potentially leaving them with even more onerous requirements, the industry insiders said.
Some executives also raised concerns during industry calls about DOGE’s access to their proprietary data that CFPB collects and questioned who Musk’s team was accountable to, given the billionaire entrepreneur’s plans for his own competing payments business, said one public policy executive at a fintech company.
Musk and President Donald Trump have both said the entrepreneur’s role at DOGE does not present any conflict of interest.
The CFPB holds vast amounts of data, including confidential supervisory reports, examination findings, investigative records and compliance records that include personal information for customers, their accounts, transaction histories and product preferences.
Industry executives said they were worried about the seeming lack of a plan in place.
“That’s something banks have always been concerned about — patchwork regulation as opposed to knowing who you are dealing with,” said James Ballentine, a former lobbyist with the trade group American Bankers Association who now runs his own consulting firm. “It’s easy to say, ‘Let’s get rid of something,’ but there has to be a plan in place.”
Spokespeople for the White House, CFPB, and DOGE did not respond to requests for comment. Musk did not respond to a request for comment.
REGULATORY VOID
Whether the agency continues to exist in some form and what its function would be is still to be seen. The White House nominated Jonathan McKernan, a former member of the Federal Deposit Insurance Corporation, as full-time director of the CFPB, leading some analysts to suspect the administration does not want to eradicate it entirely. McKernan did not respond to a request for comment.
The industry’s mixed feelings of relief and concern underscore how the Trump administration’s sweeping remake of the federal government is likely to lead to consequences that are not fully understood.
On Tuesday, Federal Reserve Chair Jerome Powell told Congress that no other federal regulator was enforcing several consumer finance laws in its absence. Some experts said the regulatory void could leave everyday Americans vulnerable to predatory practices, especially from the lightly regulated parts of the financial industry and erode trust overall.
“Banking is about trust, and it’s an industry that disfavors regulatory uncertainty,” said Matthew Biben, who co-heads law firm King & Spalding’s global financial services group. “So the longer-term question is, ‘What impact will the new direction have on consumer trust and regulatory certainty for market participants?’”
BOOKS CLOSED, LAPTOPS LEFT BEHIND
While the writing was on the wall for the CFPB, the speed of events has left the industry and staffers stunned.
On Feb 7, a Friday night, Trump appointed Russell Vought as the acting director of the CFPB. Vought, who is also Trump’s budget director, was one of the architects of Project 2025, a conservative manifesto published by the Heritage Foundation that called for the CFPB’s abolition.
A spokesperson for the Office of Management and Budget, which Vought leads, did not respond to a request for comment.
Vought quickly ordered a temporary closure of the agency. One of the CFPB staffers said they had such little warning that many employees had left their laptops and personal effects, such as family photos, kids’ artwork and potted plants, on their desks.
Another staffer said hundreds of bank examiners who were set to go and examine the books at banks and other financial firms on Monday had to change travel plans. Enforcement attorneys turned off their computers mid-way through document reviews on investigations, this person said.
This week, those challenging or facing action from the CFPB were trying to figure out whether they would have to continue to pursue or defend against those cases. Cases are pending against companies including Capital One, which was accused of cheating customers in high interest accounts; Meta, which said it was being probed about advertising financial products; and Experian, which faces a lawsuit alleging it mishandled complaints.
Meta declined comment. Experian and Capital One did not respond to requests for comment.
“There are a lot of organizations that are currently under investigation that are wondering what it means … and if potentially, the investigations will be closed,” said Anastasia Stull, a partner at Stinson law firm, which represents financial clients including some involved in lawsuits with the CFPB.
(Reporting by Douglas Gillison, Pete Schroeder, Nupur Anand, Hannah Lang and Isla Binnie; additional reporting by Lananh Nguyen and Tatiana Bautzer; Writing by Megan Davies; Editing by Paritosh Bansal and Anna Driver)
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