The Department of Justice reportedly plans to eliminate its Consumer Protection Branch, the division responsible for bringing the DOJ’s cases against fraudsters, deceptive marketing, and unsafe health products.

FDIC continued to cut staffing; aiming to shed a total of 1200 positions from its starting point of 6200. Fewer FDIC staff to supervise banks (now and in the future), manage the deposit insurance fund, conduct resolution of failed banks, and protect consumers will directly lead to a banking system that is weaker and less safe. A shortage of trained and experienced examiners was found to be a key cause of the 2023 bank failures. This decision will hurt the agency and banking system now and for years to come because the examiner pipeline will be empty.

The Federal Reserve Board requests comment on a proposed rule that will weaken the stress tests for large banks.

The Fed Board voted 6 to 1 in favor of a proposal to weaken the stress tests for large banks. Governor Barr voted against the proposal. The proposal makes changes to average stress test results over two years, delay the implementation of the resulting capital requirements, and streamline data collection from the banks to conduct the test. This proposal will be followed by other changes “later this year” to further weaken the test framework.

The Trump Administration sent out Reduction-in-Force Notices (i.e., termination. Notices) to approximately 1500 of 1700 CFPB employees, indicating that it intends to immediately reduce the agency to approximately only 200 employees. Entire agency divisions have been virtually eliminated — though a federal court has temporarily placed these terminations on hold until a hearing later this month.

The two Democratic Board members (Harper & Otsuka) were fired from the NCUA without cause.

There are thousands of credit unions around the country that provide banking services to millions of consumers throughout the country. Many of these customers are low-income and minority families and small businesses that would be forced to turn to high-cost, predatory, and discriminatory financial service providers if it were not for the credit union. Firing two of the three NCUA Board members limits the effectiveness of the agency that supervises credit unions and prevents it from doing vital work such as rulemaking.

Read Better Markets’ statement here.

The SEC extended the effective and compliance dates for rules requiring funds to more frequently report portfolio-related information to the SEC and the public.

The extension hurts the SEC’s and the public’s ability to have timely information about funds’ investments and to develop a timely and complete understanding of the market.