CFPB Top Enforcer Resigns Over Trump’s Bid to Close Probes (2)

The Consumer Financial Protection Bureau’s top enforcement official resigned his post, echoing complaints from his predecessor that the Trump administration isn’t letting the agency do its work.

Michael Salemi, the CFPB’s principal deputy enforcement director and a longtime staff member, expressed his frustration at a Thursday all-hands meeting with the CFPB’s enforcement team over the Trump administration’s move to stop virtually all agency enforcement and investigative activities, according to multiple people with knowledge of the situation who requested anonymity to discuss internal CFPB matters.

Salemi said in a Thursday email to the team that he had hoped to be able to lead an enforcement division that would continue the agency’s work even with new priorities and reduced staff.

“In the last several weeks, it’s become clear to me that, if things proceed as planned, there is no path to an effective future enforcement program at the Bureau,” Salemi said in the email, obtained by Bloomberg Law.

His last day at the CFPB will be Dec. 12, according to the email.

Salemi in a Nov. 25 email obtained by Bloomberg Law had told the CFPB’s enforcement team that some investigations would restart. The email, which came as the CFPB was preparing to head to court over renewed questions about its funding, didn’t provide specifics about which investigations would reopen or when.

“No longer is the Enforcement Division one of thuggery and unprofessional behavior,” a CFPB spokesman said. “Under Director Vought’s leadership, Enforcement will now be done respectfully, properly, and professionally.”

“Don’t let the door hit you on the way out, Mr. Salemi,” the spokesman said.

Salemi didn’t immediately respond to a request for comment.

Enforcement Freeze

Salemi’s complaints about acting CFPB Director Russell Vought and other agency leaders echo those raised by his predecessor, Cara Petersen, when she resigned in June.

“It has been devastating to see the Bureau’s enforcement function being dismantled through thoughtless reductions in staff, inexplicable dismissals of cases, and terminations of negotiated settlements that let wrongdoers off the hook,” Petersen’s June 10 email said.

Vought has paused virtually all CFPB enforcement investigations and lawsuits since taking charge in February.

The CFPB has filed only one enforcement action—against Synapse Financial Technologies Inc.—since Vought took over, and there are questions as to whether the agency will be able to complete payments to harmed consumers through its Civil Penalty Fund.

The CFPB under Vought has canceled around 20 enforcement cases and terminated several enforcement actions early. In some cases, such as enforcement actions against Navy Federal Credit Union and Toyota Motor Credit Corp., companies were able to escape millions of dollars in payments to consumers.

The CFPB has also renegotiated several settlement agreements reached during the Biden Administration to ease terms on the settling companies. The most recent attempt came this week when the CFPB asked a federal judge to approve a renegotiated deal with the Pennsylvania Higher Education Assistance Agency that would allow the student loan servicer to escape several oversight and injunctive requirements early.

Vought has also transferred all of the CFPB’s active litigation, including enforcement actions, to the Justice Department due to the Trump administration’s claim that the agency will soon run out of money because the Federal Reserve—the source of the CFPB’s funding—isn’t profitable.

But the central bank has in recent days enjoyed a paper profit on its securities transactions, which would allow Vought to request money from the Fed under the administration’s legal theory.