Cara Petersen, the Consumer Financial Protection Bureau’s leading enforcement official, is leaving the bureau, she wrote Tuesday in an email to staff.
“I have served every Director and Acting Director in Bureau's history and never before have I seen the ability to perform our core mission so under attack,” Petersen wrote Tuesday in an email seen by Banking Dive.
The CFPB’s top leaders, including Acting Director Russ Vought and Chief Legal Officer Mark Paoletta, have “no intention to enforce the law in any meaningful way,” Petersen added.
Petersen has worked for the CFPB for nearly 15 years. She has served as the bureau’s principal deputy enforcement director since December 2017, according to her LinkedIn profile. That has made her the agency’s highest-ranking official in enforcement since Eric Halperin, the CFPB’s former enforcement director, stepped down in February, days after Vought became the bureau’s acting chief.
Vought issued a stop-work order on his first weekday in charge of the agency and sent a letter to the Federal Reserve indicating the CFPB would refuse any unappropriated funding from the central bank. Plaintiffs took the CFPB to court over both actions. The National Treasury Employees Union sued the CFPB over the stop-work order and ensuing efforts by the bureau’s leadership to fire up to 95% of the agency’s staff. The city of Baltimore sued the CFPB over the Fed funding issue, and recently dropped the case after the bureau gave up its argument.
Beyond attempts to slash staff and shut off funding, the CFPB has dismissed roughly 20 lawsuits that the bureau, under the Biden administration, brought against banks, fintechs and peer-to-peer payment networks. The agency has also rescinded guidance, pivoted its focus away from nonbanks and fair lending cases, and indicated it simply wouldn’t enforce some rules.
The downsizing effort has seen support, too, from some lawmakers. Republicans on the Senate Banking Committee last week floated legislation that would cut off the pipeline between the CFPB and the Fed and bring bureau funding under congressional appropriations.
“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 wrote Tuesday.
Under one iteration of the reduction in force sought by Vought – and halted by a district judge – the CFPB’s enforcement staff would have been cut from 248 to 50.
“It is with a heavy heart that I leave my dream job, and the agency I love, but I can no longer effectively lead Enforcement in these circumstances,” Petersen wrote.
Petersen’s pending departure means the CFPB has no acting enforcement director.
In her email, Petersen thanked the CFPB’s enforcement workers for their role in returning more than $12 billion to consumers since the bureau launched in 2011.
“Our job has always been to root out misconduct, compensate consumers that were harmed, and deter illegal conduct in the consumer finance sector,” she wrote. “It is difficult to say goodbye to all of you and to the CFPB. … While I wish you all the best, I worry for American consumers.”
A three-judge panel at the U.S. Court of Appeals for the District of Columbia is expected to rule on District Judge Amy Berman Jackson’s injunction halting CFPB leaders’ plans to cut 1,483 of the bureau’s roughly 1,700 employees.
