Bloomberg News
Cara Petersen, the principal deputy enforcement director at the Consumer Financial Protection Bureau, has resigned from the agency, stating in an email to staff that the bureau’s leadership under the Trump administration has “no intention to enforce the law in any meaningful way.”
On Tuesday, Petersen sent an email to the CFPB’s enforcement staff announcing she was leaving the agency after nearly 15 years. She served as the de facto acting enforcement director for the past four months after the resignation in February of Eric Halperin, the former enforcement chief, earlier this year.
The Trump administration has made a pointed effort to reduce the footprint and manpower at the CFPB since President Trump took office in January. CFPB Director Russell Vought is seeking to fire 90% of the CFPB’s employees and is engaged in a contentious legal battle with the National Treasury Employees Union, which is trying to block the administration’s restructuring plans, which it says amounts to a dismantling of the agency. Very little enforcement is being done at the agency, which has dismissed more than 20 pending enforcement cases.
“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 in an email, obtained by American Banker.
Petersen called out the Trump administration for its actions toward the agency since taking office in January. Her departure means there is no current acting enforcement director at the agency.
Acting CFPB Director Russell Vought and Chief Legal Officer Mark Paoletta have sought to cut the CFPB’s staff to just 200 employees, down from 1,750 before Trump took office in January. Since the Trump administration took over the agency, the CFPB has dramatically cut enforcement and supervision and halted all oversight of nonbanks and Big Tech firms.
Vought and Paoletta eliminated the CFPB’s litigation support team and front office positions, which impacted the enforcement division’s ability to conduct investigations. Though Petersen served as the acting head of enforcement, she was not consulted on widespread reductions-in-force, or RIFs, that were planned at the agency.
“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,” she wrote. “Our job has always been to root out misconduct, compensate consumers that were harmed, and deter illegal conduct in the consumer finance sector. We stand on the front lines protecting consumers and the economy against the risks and harms of another financial crisis.”
Petersen was named principal deputy enforcement director in 2017 after serving as an acting regional director of the northeast region. She served in a leadership role in the first Trump administration and the Biden administration.
The CFPB declined to comment on Petersen’s departure or her resignation message.
“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 said in the email.
The CFPB’s staff is waiting for a ruling by a three-judge panel of the U.S. Court of Appeals for the District of Columbia on whether a district court erred in issuing an injunction that stopped the CFPB leadership from cutting roughly 1,500 employees through a government RIF.
