CFPB ‘Death Memos’ Herald Closed Investigations, Steep Job Cuts

The Consumer Financial Protection Bureau is asking examiners and enforcement attorneys to write memos on pending matters that many employees believe will be used to close investigations and justify extensive staffing cuts, multiple people familiar with the matter told Bloomberg Law.

It’s not uncommon for new agency leaders to seek a rundown on efforts to police regulated companies, as a way to ensure the work matches the administration’s priorities. But employees are wary of providing what some are calling “death memos” to Trump-appointed CFPB officials looking to gut the agency, according to people with knowledge of the situation who requested anonymity to avoid retaliation.

After they took the reins in February, acting CFPB Director Russell Vought and his Chief Legal Officer Mark Paoletta expanded an order freezing nearly all of the agency’s work and barred examiners from even contacting the companies they supervise, multiple people familiar said. Examiners must now respond to requests they received only in recent weeks asking them to justify any “matters requiring attention,” a supervisory term for compliance problems that a company needs to address.

The latest requests, widely seen as a prelude to closing out examinations and enforcement probes, come as the Trump administration moves to fire most employees on those teams and as the Republican-led Congress advances legislation to slash the agency’s budget by around 70%.

“There’s no doubt in my mind that there’s very much a political motivation to this,” said Mayra Rodríguez Valladares, the managing principal of consulting firm MRV Associates and a former Federal Reserve Bank of New York staff member.

The CFPB didn’t respond to a request for comment. CFPB leaders have defended their moves as an attempt to streamline the agency.

Compliance Checks

The 2010 Dodd-Frank Act that created the CFPB required it to supervise all banks with over $10 billion in assets and designate the largest participants in other consumer finance markets for supervision. The CFPB has created “larger participant” rules for student loan servicers, debt collectors, consumer credit reporting companies, and international money transmitters, among others, since opening its doors in 2011.

Compliance examiners flag MRAs—as well as matters requiring “immediate” attention—for banks and other companies under supervision and give the firms a chance to fix the issues confidentially. Notifications of problems typically go to top executives and the company’s board.

Problems that remain unresolved can be referred for public enforcement proceedings, although examiners also have their own tools to make sure companies fall in line, current and former examiners said. They can require companies to send money back to harmed consumers, boost spending on compliance technology, and fix business practices that might run afoul of the law.

To close out open matters, an examiner must ensure that remediation payments are completed and long-term fixes are implemented.

But examiners under Vought can only review company documents already in their possession, which means they have to trust what a company tells them rather than verifying the fixes, multiple people familiar with the matter said.

It would be difficult to justify keeping an exam open if examiners can’t communicate with the companies they supervise or obtain the necessary documentation, they said.

CFPB leaders on April 16 separately directed the examination unit to slash the number of supervision “events” by 50% and to shift attention toward traditional banks. Doing so will “avoid the ever-increasing number of supervisory exams, which are multiplying the cost of running businesses and raising consumer prices,” according to a message to staff.

Closing out a swath of supervisory problems would also allow the agency to argue that a large examination force is no longer needed, as the US Court of Appeals for the District of Columbia Circuit weighs the Trump administration’s bid to fire most CFPB employees.

The CFPB plans to drop its examination force to 50 people down from around 440, according to court records in the litigation challenging Vought’s mass layoffs.

“They’re being asked to justify their existence,” Rodríguez Valladares said of the examiners.

Enforcement Closeouts

The same holds true for enforcement attorneys who have been asked to write similar memos.

Enforcement staff refer to the two-page documents as “death memos” because they presume that most, if not all, of the cases will be dropped, multiple people with knowledge of the situation told Bloomberg Law.

The CFPB has already voluntarily dismissed around 20 enforcement actions brought during the Biden administration, including cases targeting JPMorgan Chase & Co., Bank of America Corp., Wells Fargo & Co., and Walmart Inc. It’s also moved to alter or eliminate settlements that were previously agreed to and approved by courts.

The enforcement division is also facing significant cuts. Court documents show Vought and his team want to reduce the CFPB’s enforcement unit to 50 people, down from 198.

Overall, the CFPB plans to cut nearly 1,500 of the over 1,700-member workforce that was in place at the beginning of 2025, the court records show.

The total headcount has already shrunk in the months since President Donald Trump took office, as dozens of CFPB staff members either retired or found new work amid repeated attempts to fire them.

“If I were being asked to do this, I would be throwing in the kitchen sink to show how super busy I am,” Rodríguez Valladares said.