WASHINGTON–The Trump administration said the Consumer Financial Protection Bureau will “deprioritize” efforts to protect student borrowers and people with medical debt, as well as oversight of digital payment platforms such as Venmo and Zelle, while also saying its focus will shift bac to depository institutions, a move that has mystified many analysts.

At the same time, the CFPB has also confirmed massive job cuts are moving forward.

According to a memo obtained by the Wall Street Journal, Chief Legal Officer Mark Paoletta has outlined plans to broadly dial back regulatory efforts and focus most of its remaining energy on large banks instead of tech firms, student loan servicers, and other financial companies that had consumed its attention under the prior administration, the Journal noted.

Critics said large financial institutions are already overseen by other regulators. 

‘Complaint Magnet’

“In recent years, some of the bureau’s most high-profile efforts have involved policing those non-banks,” the Journal reported. “It has played a particularly central role policing student loan servicers, the massive government contractors responsible for collecting monthly payments from borrowers that have long been a magnet for customer complaints.”

As the CU Daily has reported, the Bureau has moved to drop much of the litigation and cases it was pursuing, and has dropped proposals around overdrafts and credit card late fees.

According to the Journal, in his memo, Paoletta criticized the Bureau for focusing too much attention on non-banks like loan servicers, noting they now consume 60% of its supervision efforts where staff examine firms’ internal data and interview employees to ensure they are following consumer protection laws. He said non-banks should instead take up 30% of their supervision, which he said was the proportion in 2012.

The memo drew immediate criticism from consumer advocates, who said that the bureau would leave student borrowers vulnerable to mistreatment, and that previous leaders had focused on non-banks because they tended to pose some of the biggest risks to consumers and the financial system, the Journal reported.

Job Cuts

Separately, the Trump administration is moving forward with plans to cut at least 1,500 employees. The agency last year said it had 1,758 employees as of the end of September, the Journal said. 

“Dismantling the CFPB in the face of a court order blocking an illegal shutdown is yet another assault on consumers and our democracy by this lawless Administration, and we will fight back with everything we’ve got,” said Sen. Elizabeth Warren (D-MA). It was Warner who led the effort to create the Bureau.