Behind CFPB gutting, nearly 200 canceled contracts
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Dozens of contracts critical to the functioning of the Consumer Financial Protection Bureau (CFPB), have either been canceled or are on their way to termination, according to a detailed affidavit filed in federal court last week.
Why it matters: The CFPB is an agency tasked with protecting people from financial fraud, but it has been gutted by the White House over the past two weeks as part of the broad purge of the federal government.
- The filing offers more detail on what may have happened.
Catch up quick: The affidavit was filed by someone calling himself Charlie Doe, who says he is a contracting officer at the agency, which is a person who negotiates, administers and terminates contracts.
- It is part of a lawsuit filed by the National Treasury Employees Union against Russell Vought, the CFPB acting director, that claims efforts to "shut down" the agency are unlawful.
Where it stands: The plaintiffs in the lawsuit were able to get the court to pause contract terminations. But that agreement will expire today, when another hearing in the case is scheduled.
- It is unclear what happens next. Doe warns that if there is no order prohibiting the termination to continue, the vast majority of these contracts will be fully terminated within the week.
Zoom in: Doe says he has worked in government for 25 years, but the past few weeks "are unlike anything I've ever seen at any agency during any change in administration."
- Agency staff were directed to cancel a total of about 174 contracts with vendors, for training of examiners who supervise banks, for handling cybersecurity, and for serving as expert witnesses in litigation.
- Canceled contracts are listed on DOGE's Wall of Receipts, and appear to also include mortgage data analytics and one for short- and long-term disability insurance services.
What they're saying: "These are the basics of what it takes to run an agency," Julie Morgan, former associate director at the CFPB, tells Axios.
Yes, but: The Trump administration, in a court filing, says it will continue to operate the CFPB and has nominated a new director.
The intrigue: Some contracts are related to maintaining the agency's much-lauded consumer complaint database, where members of the public can go to register issues they're facing with companies. It is generally viewed as one of the most popular and least controversial services the CFPB offers.
- After news got out that a contract for a complaint hotline was terminated, that agreement was reinstated. That doesn't mean the agency's complaint mechanisms are working. A different contract to maintain the complaint database remains canceled, per the affidavit.
- "There is now a backlog of thousands of complaints that haven't been forwarded to financial institutions," the affidavit says.
Between the lines: You don't need vendors or services if your agency isn't doing anything. Most employees were told earlier this month to stop their work.
- Over the past few days, the CFPB dropped at least seven lawsuits it had filed against financial institutions, alleging they had ripped off student loan borrowers, those who buy mobile homes and others.
