Warren says CFPB overhaul has cost consumers up to $26.5 billion

Sen. Elizabeth Warren says the Trump administration’s remake of the Consumer Financial Protection Bureau has cost Americans up to $26.5 billion. For consumers, the fight is about common bank charges, including credit-card late fees and overdraft fees, that can hit household budgets directly.

Warren, a Massachusetts Democrat, released the estimate Thursday in a report focused on changes made while Russell Vought serves as acting director of the CFPB. The CFPB is the consumer finance watchdog created after the 2008 financial crisis to police banks, lenders and other financial firms.

The report arrives as Vought faces a Senate oversight hearing on the agency’s direction. Senators are also weighing President Donald Trump’s nomination of Brian Johnson, a former CFPB deputy director and Capital One executive, to run the bureau permanently.

Where Warren says the costs come from

Most of Warren’s estimate is tied to two fee rules the CFPB has pulled back under the Trump administration, according to the report.

Warren’s report assigns up to $15 billion in consumer costs to the CFPB’s decision to abandon a rule that would have capped most credit-card late fees at $8. The agency had previously estimated that the cap would save consumers about $10 billion a year.

The report attributes another $7.5 billion to the repeal of a CFPB overdraft fee rule. That rule would have limited many banks to charging $5 when customers overdrew their accounts, according to Warren’s report.

Overdraft fees are charges banks assess when customers spend more than they have available in an account. Credit-card late fees are charges card issuers impose when borrowers miss a payment deadline. Both fees are small in isolation for some customers, but the CFPB’s prior estimates treated them as broad consumer-cost issues because they apply across millions of accounts.

The remaining roughly $4 billion in Warren’s estimate comes from enforcement actions and settlements the CFPB has dropped or abandoned, according to the report. Enforcement actions are cases regulators bring against companies they accuse of violating consumer finance laws. Some of the dropped matters, Democrats say, would have sent money back to consumers.

A broader fight over the agency

The Trump administration has cut CFPB staffing, narrowed or dropped dozens of enforcement cases and rolled back Biden-era rules since taking office last year. Administration officials have described the changes as a refocus on the bureau’s core mission.

Republicans have defended the overhaul as a necessary check on a regulator they view as too aggressive. Democrats, led by Warren, say the changes have weakened a key consumer protection agency and left Americans more exposed to unfair or deceptive financial practices.

Warren has a long history with the CFPB. She conceived of the agency and helped establish it after the financial crisis, making the bureau one of her signature policy projects.

Vought’s hearing is expected to cover the fee-rule reversals, dismissed enforcement actions and consent orders, and an allegation that the CFPB recently removed 15 years of consumer data from its website. A consent order is a negotiated enforcement settlement in which a company agrees to certain terms, often without admitting wrongdoing.

Ahead of the hearing, Warren also sent Vought a letter listing congressional oversight requests she said he had not answered during his time leading the agency.

CNBC reported that the White House and the CFPB did not immediately respond to requests for comment.

This story draws on original reporting from CNBC.