According to the parties’ joint status report, the CFPB renounced an order that initially directed the agency to oversee Google’s payment division. The status report additionally included that Google Payment agreed to drop its lawsuit against the CFPB that originally challenged the order.

The initial order was issued by the CFPB under the former CFPB Director, Rohit Chopra. It represented the agency’s broader effort in exerting pressure on larger tech companies by supervising their consumer financial activities. Such efforts were a priority of the Biden Administration, especially in regulating non-bank financial institutions such as digital wallets and payment application such as Venmo and Zelle.

However, the Trump administration has taken a different stance on such regulation efforts. Since President Trump took office in January, the CFPB has dropped numerous cases against payment application companies and other financial companies. In February, the agency dropped a lawsuit against Rocket Homes that alleged the company of offering kickbacks to brokers who referred customers to Rocket Mortgage. In March, the agency dropped a lawsuit against Zelle, Wells Fargo, and other major banks that alleged the companies of failing to protect consumers from widespread fraud.

Under the leadership of the now acting Director of the CFPB, Russell Vought, the CFPB retracted the Google Payment order on the basis that “extending Bureau supervision to GPC would be an unwarranted use of the Bureau’s powers and resources,” according to the Withdrawal Notice.

The agency continues to display its opposition to payment application regulations and enforcement actions in line with the Trump administration’s agenda. This latest dismissal could lead to additional challenges against regulations aimed at oversight of tech companies.

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According to the bill, the CFPB’s budget would take a big hit as well as its penalty money obtained from enforcement actions. The funds received from these enforcement actions will be used for victim compensation with the leftovers being sent to the Treasury. Specifically, the legislation will require that “if the Bureau makes payments to all of the direct victims of activities for which that civil penalty was imposed, the Bureau shall transfer all amounts that remain in the Civil Penalty Fund with respect to that civil penalty to the general fund of the Treasury.”

Essentially, the CFPB’s budget would decrease around 60% and its funding from the Federal Reserve would be capped at 5% of the central bank’s operating expenses under the proposal — down from the current limit of 12% as laid out in the Dodd-Frank Act.

The Legislation Represents Larger Effort to Cut Government Spending

The CFPB has come under a significant amount of fire since the start of the Trump administration. There have been many efforts by President Trump to dismantle the agency such as attempted mass firings, an order to suspend agency operations, and so on.

This legislation represents a broader effort by Republicans to create at least $1.5 trillion in spending cuts in order to pass a $5 trillion tax cut as part of President Trump’s policy agenda. “For too long, government spending has been on a one-way ratchet,” House Financial Services Committee Chairman French Hill, R-Ark., said at the start of Wednesday’s markup. “We are here with one purpose, to do our part to put our nation back on a responsible fiscal trajectory.”

Republicans are in support of this funding as they see it as a means towards diminishing “reckless government spending.” Meanwhile Democrats perceive the bill as hypocritical in that such substantial spending cuts themselves are “reckless.” Accordingly, many Democrats believe that the CFPB runs a profitable business, putting more money in consumer pockets than the expenses it incurs to do so.

PCAOB to be Dissolved Into the SEC

Under the proposed legislation, the PCAOB, known to oversee the audits of public companies, will merge into the SEC. This results from Republican criticism of the agency that it lacks accountability and transparency. The SEC would essentially assume the duties and responsibilities of the PCAOB.

While many are in support of such a significant move, many believe that such a move is not practical. Congresswoman Janelle Bynum cautioned against merging the PCAOB into the SEC, describing the proposal as a significant and potentially risky shift that demands closer examination. She urged Republicans to “pump the brakes” and introduced an amendment that would delay the transfer of oversight authority until the SEC can confirm that the change would not heighten investor risk.

In contrast, many believe that that such a move is crucial towards President Trump’s government spending agenda. “I appreciate my colleague’s newfound passion for fiscal discipline,” Congresswoman Ann Wagner said. “However, the committee print before us today is a result of extensive member input to deliver on the promise to rein in out-of-control spending.  

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According to Papa’s complaint, the girlfriend gained access to hundreds of thousands of Deutsche Bank clients’ private banking information including millions of private banking transactions. The girlfriend was alleged by Papa to be a Chinese citizen with “significant computer expertise.”

As an information technology employee at Computacenter, Papa was responsible for overseeing Computacenter employees working in the Deutsche tech rooms. According to Papa, while he was working his former job, he discovered that a colleague of his gave tech room access to his girlfriend even after being told that he cannot do so by Papa.

“CC (Computacenter) and DB (Deutsche Bank) were immediately aware that this significant security breach was required to be disclosed to the [SEC] due to DB’s status as a public corporation subject to SEC regulation,” the complaint reads. “Public disclosure of the security breach at headquarters would likely endanger CC’s multi-million-dollar contract with DB and significantly damage its corporate reputation as a company responsible for computer system security for major financial institutions and Fortune 500 corporations.”

Papa said that immediately informed his employee of the alleged wrongful access as well a Deutsche Bank vice president Marc Senatore. Papa argued that Senatore as well as his supervisors should have reported the incident to the Securities and Exchange Commission. However, according to Papa, his whistleblower complaint was immediately ignored as a means to protect Computacenter and its $50 million dollar deal with the Bank. As a result, Computacenter terminated Papa on July 31^st, 2023.

Papa’s lawsuit requests of $25 million results from his request of punitive, compensatory and additional damages. Specifically, Papa alleges that both Computacenter and Deutsche Bank engaged in negligence, tortious interference, and other violations of New York Labor Law.  

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The draft provides clearer guidance on when a digital asset falls under the jurisdiction of the SEC, the CFTC, or both. Essentially, the draft would grant power and funding to the CFTC and require firms to register with the it as well. The SEC, on the other hand, would retain oversight over securities and specific hybrid assets. It will also have the authority to oversee digital commodity activities by SEC-registered broker-dealers and exchanges, even though the  firms will be required to register the activity with the CFTC as well.

In addition to allocating oversight authority to the SEC and CFTC, the draft also provides key crypto definitions such as definitions for “digital commodity,” “blockchain system,” and “stablecoins.” In fact, it explicitly excludes digital commodities and payment stablecoins from the definitions of a security.

This draft represents a longstanding effort by the Republican Party to regulate digital assets. According to many, the digital assets market is in need of regulation as it is unstable and dangerous without such.  “We made historic progress in the 118th Congress to build bipartisan, bicameral consensus in crafting a functional regulatory framework for digital assets,” House Financial Services Committee Chair French Hill said. “Our discussion draft builds upon that work and provides much-needed regulatory clarity for the digital asset ecosystem by protecting consumers and safeguarding the long-term integrity of digital asset markets in the United States.”

Congress in Disagreement as to how Crypto Should be Regulated

Although many are in support of such regulations, many are skeptical of how exactly it will be regulated and whether this bill represents the most efficient and effective way of doing so. Congresswoman Maxine Waters announced that she intends to block the draft as she is concerned with conflicts of interest that may arise from the Trump family crypto investments.

Other senators, such as Ruben Gallego said that he understands the need to regulate digital assets but yet finds issue with how the bill itself addresses such a use. “[T]he bill as it currently stands still has numerous issues that must be addressed, including adding stronger provisions on anti-money laundering, foreign issuers, national security, preserving the safety and soundness of our financial system, and accountability for those who don’t meet the act’s requirement,” a group of Democratic Senators led by Gallego said. Although they are against the bill’s current version, they are “eager to continue working with our colleagues to address these issues.”

While both the Democratic and Republican parties are in agreement that the digital asset market should be a regulated one, the parties are in some sort of disagreement as to how exactly it should be regulated. Additional hearings are scheduled to take place to hear each side’s views on the matter.  

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The panel’s decision comes almost a month after an appeals court modified a trial court’s order which effectively allowed the CFPB to engage in mass firing after conducting a “particularized assessment” of each fired employee. Under this order, the CFPB was required to show that any dismissed employees were in fact “unnecessary expenses” to the agency.

The D.C. panel specifically defined “particularized assessment” as involving “a determination, conducted by the decisionmaker responsible for the reduction in force, that each division or office within the Consumer Financial Protection Bureau will be able to perform any statutorily required duties of that division or office without the employees subject to the reduction in force.”

The complete ban of mass firings issued by the panel comes as a result of a dispute on whether the CFPB Director, Russell Vought, can execute the mass firings while in compliance with the panel’s definition of “particularized assessment.” Many top officials within the CFPB believe that the agency only requires around 200 employees to satisfy its duties and responsibilities such as supervising banks and enforcing consumer financial law. However, many agency employees believe that mass firings would essentially render it impossible for the CFPB to function properly.

The panel’s decision, although not permanent, effectively prohibits the CFPB from pursuing “reductions-in-force”.  According to the panel, it is best to restore the block of mass firings while the parties battle it out in court. By doing so, CFPB employees would still be protected in the case that President Trump loses.

The decision will ultimately be in effect until the panel rules on the original trial court’s injunction issued by Judge Amy Berman Jackson. Judge Jackson initially imposed the injunction that prohibited the CFPB from conducting mass employee firings but also deleting agency data, permanently shredding service contracts, idling employees with stop-work orders or taking the agency’s complaint-handling functions offline. Judge Jackson based her ruling on evidence that showed Director Vought’s “a hurried effort to dismantle and disable the agency entirely.

According to the panel, this order “ensures that plaintiffs can receive meaningful final relief should the defendants not prevail in this appeal, rather than continue collateral litigation over the meaning and reviewability of the ‘particularized assessment’ requirement imposed by this court’s stay order.”

“Reinforcing this conclusion, we have already accommodated the government’s interests by substantially expediting the [injunction] appeal, with oral argument scheduled less than three weeks from today,” the order added. “At that time, we will carefully consider the separation of powers and other arguments raised by the parties.”

One of the panel judges, Judge Rao, dissented from the decision to restore the injunction. He said that the panel’s order raises many separation of power issues and that the CFPB should be permitted to follow President Trump’s orders. Specifically, Judge Rao said that “because the preliminary injunction entered by the district court raises serious separation of powers concerns and has paved the way for ongoing judicial supervision of an executive branch agency, I would continue the stay pending appeal.”

The CFPB has come under fire recently for its series of voluntary lawsuit dismissals against banks and other financial institutions. The agency recently dropped its $2.25 million student loan debt collection against the National Collegiate Student Loan Trusts. The lawsuit aimed at defending college students after they allegedly became victims of deceptive and unfair debt collection litigation strategies.  

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President Trump fired Rebecca Slaughter and Alvaro Bedoya on March 27^th of this year. Slaughter and Bedoya were the only two Democratic FTC Commissioners. They brought a lawsuit against Trump, alleging that his removal of them was unlawful under a 1935 Supreme Court case of Humphrey’s Executor v. United States. In that case, the Supreme Court ruled that FTC Commissioners can only be removed for cause. However, Supreme Court rulings since then have indicated that there may be exceptions to the Humphrey’s Executor ruling.

The Court’s ruling in Seila Law v. CFPB indicated that there may be an exception to the Humphrey ruling in holding that it is unconstitutional for an administrative agency to be headed by a single director not removable by the president at will. Many point to the distinction, however, that in Seila Law the agency in question was headed by one director whereas the FTC has multiple commissioners.

The Trump response attacked the ruling in Humphrey’s Executor by saying that much has changed since that case was decided in 1935 including the added decision in cases such as Seila Law and that Humphrey’s Executor is an actually an exception and not the governing law. “The Supreme Court’s characterization of the FTC in [Humphrey’s Executor v. United States] — as primarily a legislative or judicial aid that prepared reports and recommendations for the Congress and the judiciary — bears no resemblance to the FTC today,” President Trump’s response said. “FTC commissioners must therefore be removable at will to ensure they, like the rest of the executive branch, are accountable to the people who elect the president.”

FTC Commissioners Defend Their Position 

Amit Agarwal, the attorney for Slaughter and Bedoya, said that to allow such firings is to against centuries of cases decided by the Supreme Court. He added that the idea that the constitution gives the president unlimited power to fire FTC commissioners is a “radical” one. “In fact, it ignores nearly a century of settled law that limits the circumstances under which a president can remove commissioners,” Agarwal said. “Americans are seeing right now how much damage a president can do by wielding unchecked power over the economy.”

“This isn’t about Democrats vs. Republicans or liberals vs. conservatives — it’s about a stable economy governed by laws rather than political whims,” Agarwal added. “The extraordinary intrusion here is the president’s attempt to give himself a power Congress withheld for good reason.”

Slaughter and Bedoya have received support from most of the Democrats in Congress. Attorneys general from 20 states and the District of Columbia filed an amicus brief in support of the former commissioners, arguing that their dismissals violated federal law, which restricts their removal to instances where cause is demonstrated.  

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This rule—commonly referred to as Small Business Lending Under the Equal Opportunity Act or Section 1071 of the Consumer Financial Protection Act—was originally issued during the Biden administration and requires banks, small business lenders, and other financial institutions to report data on their small-business loans, including applicant demographics, pricing, and approval rates.

In a court filing responding to a challenge brought by a merchant cash advance group, the CFPB indicated its intent to reissue the rule, citing the agency’s new leadership as a basis for its decision.

“New leadership has been assessing the Final Rule and the issues that this case presents to determine the CFPB’s position. CFPB’s new leadership has directed staff to initiate a new Section 1071 rulemaking,” according to the agency’s filing. “The CFPB anticipates issuing a Notice of Proposed Rulemaking as expeditiously as reasonably possible.”

The start of the Trump administration brought a change in the CFPB’s leadership. New leadership arrived at the CFPB on January 31, 2025, when Scott Bessent was named Acting Director of the CFPB, and again on February 7, when Russell Vought replaced Scott Bessent as Acting Director.

Under the Biden administration, the rule faced many legal challenges claiming that it was too burdensome and invasive. While many were against the rule, many supported it on the basis that it reinforced fair lending enforcement.

Although the CFPB previously prioritized defending the rule against legal challenges during the Biden administration, its recent filing indicates a shift in approach, suggesting it will no longer defend the original rule and instead modify and reissue it.

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The original lawsuit alleged that multiple Whole Food managers regularly transferred costs from one department to another in order to circumvent its “Gainsharing” program, which provides bonuses to employees whose departments come in under budget. The managers effectively reallocated expenses from deficit-running teams to those with surpluses in order to reduce the reported surpluses and avoid triggering bonus payments tied to them.

After the lawsuit was filed, Whole Foods fired nine managers in Washington D.C., Maryland, and Virginia who were alleged of engaging in the cost transfers. The lawsuit additionally claimed that the grocery chain’s unlawful practice ranged nationwide and “a decision made at the executive level … to pad company profits.” While Whole Foods admitted to wrongdoing tied to the nine managers, it denied the claim that such actions occurred nationwide.

This settlement comes after the judge of the case denied the workers’ request to certify a class of all employees that had not received proper compensation under the Gainsharing program. The class was to consist of more than 5,000 employees from the nine stores and more than 147,000 employees nationwide. The judge ultimately denied the request stating that it would be too difficult to certify the class since each employee had his or he own individual issue. Additionally, the workers did not show that all potential class members were not properly paid by Whole Foods alleged practice.

The workers and Whole Foods requested 60 days in order to finalize the terms of the settlement as they have not done so already.  

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According to Uyeda, Gensler was too quick to enact rules. The “shortcuts” Gensler took led to numerous legal challenges which posed unnecessary expenses, according to Uyeda.

The Acting SEC chair now wants to adopt a different approach to SEC rulemaking- one that he believes will be more efficient and effective in its purpose. “Turning to future rulemaking, the Commission should act like a super-sized freighter, not a speed boat — and that means returning to a smoother regulatory course than the rapid changes that have been promulgated over the last four years, “Uyeda said.

The Administrative Procedure Act requires proposed rules to have a “notice and comment” period. While the duration of such a period is not explicitly provided, a comment period of at least 60 days has been endorsed by the Administrative Conference of the United States for significant regulatory actions. However, Uyeda pointed out that a large number of proposals were afforded comment periods well below 60 days under Gensler. “45-day, and even 30-day, comment periods were the norm… which “represented a significant deviation from everything that I had been taught about rulemaking as a member of the staff in my nineteen years with the Commission,” according to Uyeda.

Uyeda’s Steps Toward Implementing the “Blueprint” to Reform SEC Rulemaking

Uyeda has already taken a number of actions in pursuit of his “blueprint’s” implementation. The SEC Chair granted private fund advisers additional time to comply with newly expanded reporting requirements and extended compliance deadlines for a marketing rule aimed at environmental, social, and governance (ESG)-focused funds.

He also directed his staff to develop recommendations on re-proposing certain aspects of the recently-adopted Form N-PORT reporting requirements. This requirement mandates that certain funds regularly report their holdings to the SEC, with last year’s update requiring more frequent and detailed disclosures.

“Commenters raised concerns about more-frequent public disclosure of funds’ portfolio holdings,” Uyeda said in connection to the Form N-PORT changes. “Among other issues, are these concerns heightened by continuing advances in artificial intelligence?”

Uyeda also mentioned a possible change to crypto regulations including the added requirement for investment advisers to place customers’ crypto assets with a qualified guardian.

Ultimately, Uyeda emphasized how SEC rulemaking must “respect the limits of our statutory authority.” He understands that while this may take some time and patience, it is significantly more important that the SEC “take the time to do things carefully and methodically, rather than rush and risk actions that are not fully thought through.” This approach will ultimately help the SEC mitigate legal challenges, reducing costs, and most importantly, ensure that the agency stays within the scope of its authority.  

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Trump’s firing has mainly come under question due to the 110-year-old precedential case of Humphrey’s Executor v. United States. The Supreme Court in this case ruled that the president cannot fire an FTC Commissioner unless the president finds “good cause” such as malfeasance or neglect of duties. Under this rule, FTC commissioners cannot be removed at will, making President Trump’s actions a direct contradiction to the case’s established protections.

However, succeeding cases seemingly put the main holding in Humphrey’s Executor at risk of being overruled. The Court’s ruling in Seila Law v. CFPB indicated that there may be an exception to the Humphrey ruling in holding that it is unconstitutional for an administrative agency to be headed by a single director not removable by the president at will. Many point to the distinction that in Seila Law, the agency in question was headed by one director whereas the FTC has multiple commissioners.

This is not the first time that President Trump has called Humphrey’s Executor into question. In February, the Trump administration fired former National Labor Relations Board member Gwynne Wilcox and Hampton Dellinger from the Office of Special Counsel. However, a District Court reversed the firings under the principles set out by Humphrey’s Executor. Although the court did rule against President Trump, his administration appealed the ruling which will most likely end up in the Supreme Court’s hands for a final decision.

Trump’s Firings Elicited Both Criticism and Support

Bedoya and Slaughter announced that they will challenge this termination as they claim it goes beyond the President’s executive authority to remove officers. “I woke up this morning, as I have every day for nearly the last seven years, eager to get to work on behalf of the American people to make the economy more honest and fair,” Slaughter said in a statement. “But today the president illegally fired me from my position as a Federal Trade Commissioner, violating the plain language of a statute and clear Supreme Court precedent. Why? Because I have a voice. And he is afraid of what I’ll tell the American people.”

Although President Trump’s action draw controversy, many view Humphrey’s Executor as wrongly decided on the basis that it goes against constitutional principles that grant the president broad control over the government. “President Trump has the lawful authority to manage personnel within the executive branch,” White House spokesperson Taylor Rogers said. “President Trump will continue to rid the federal government of bad actors unaligned with his common-sense agenda the American people decisively voted for.”

FTC Chair Andrew Ferguson adding onto the support of President Trump’s firings stated that he has “no doubts about Trump’s constitutional authority to remove Commissioners, which is necessary to ensure democratic accountability.”

Ultimately, President Trump’s firings challenges a major Supreme Court decision, an action that rightfully invites both criticism and support. While these firings will certainly face legal challenge and end up in a district court, the issue is likely to reach the Supreme Court, which may ultimately decide whether to overturn the landmark case of Humphrey’s Executor.  

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