Tech experts Trump fired from US watchdog say consumers at risk

US consumers are at greater risk of being exploited by tech giants and financial firms after President Donald Trump fired a team of technologists from the Consumer Financial Protection Bureau (CFPB), former staff and experts said.

As part of a broader drive to cut federal employees, up to 20 technologists who specifically investigated artificial intelligence (AI), algorithms, and confusing user interfaces were sacked on Feb 13 from the watchdog, which regulates financial products and services to ensure fair practices.

Eric Null, who leads work on privacy legislation at the Centre for Technology and Democracy, a Washington–based nonprofit that focuses on digital rights, said malicious individuals would be empowered by the weakening of the CFPB.

"With little-to-no oversight, wrong-doers and fraudsters will only be emboldened to exploit the opportunity to engage in harmful behaviour, like violating people's privacy or engaging in fraud," he told the Thomson Reuters Foundation.

On Feb 10, the White House described the CFPB as a "woke, weaponised arm of the bureaucracy".

The Trump administration then dismissed scores of its 1,700 workers before temporarily agreeing not to fire any more staff, according to a court order issued on Feb 14 after a case brought by an employee union and others.

The sudden halt to CFPB's works leaves much of consumer finance, from mortgage companies to payment apps, unsupervised, and removes a venue where consumers could file complaints about their providers.

Erie Meyer, the CFPB's former chief technologist who resigned on Feb 7 before the sackings, told the Thomson Reuters Foundation that her team worked on the expansion of chat bots and consumer finance, among other things.

Locked out of their work accounts, it was impossible for team members to say exactly how many CFPB technologists had been fired, but Meyer said it was all, or very nearly all of them.

"What happens when a senior calls their financial institution and asks for help and gets stuck in a doom loop with a robot? I think it's really important (to have) somebody who not only knows what AI is, but can understand what it would mean to somebody who was urgently trying to get help," she said.

The CFPB did not respond to a request for comment on the sackings before publication.

PAYMENT SYSTEM SCRUTINY

The CFPB was set up in 2010 to protect consumers after lax mortgage rules and other industry practices led to the financial crisis of 2008. Some financial firms have accused the bureau of overreach and overzealous enforcement actions.

Since it started to hire technologists in 2022, the CFPB has issued several multi-million dollar payment orders against financial technology companies including Wise, formerly TransferWise, Block, which operates mobile payments app Cash App, and Apple and Goldman Sachs over the Apple credit card.

Payment companies are investing more in technology such as AI, while tech firms such as Meta, Apple, Google are expanding into the financial sector. All have come under CFPB scrutiny.

Billionaire Elon Musk, who owns X, formerly Twitter and is leading Trump's cost-cutting programme, has vowed to destroy the CFPB as part of a broad purge of the federal labour force.

Musk and other tech CEOs, including Amazon's Jeff Bezos and Meta's Mark Zuckerberg, have sought to foster close relationships with Trump and attended his Jan. 20 inauguration.

Their companies have modified internal policies to align with Trump's own agenda and the executive orders he has signed since taking office.

Following the sackings at the consumer watchdog, ongoing investigations and legal battles - including into tech giants - are in limbo.

CFPB opened an investigation into Meta in October over alleged use of financial information from third parties for advertising. Meta refuted the claims at the time and did not respond to a request for comment before publication.

In December, the CFPB said it had supervising authority over Google Pay, and the search giant sued the agency over what Google spokesman Jose Castaneda called "a clear case of government overreach".

"It is possible that CFPB-initiated litigation against certain favoured companies may not be pursued as rigorously, or at all, either for ideological or staffing-related reasons," Null told the Thomson Reuters Foundation.

FUTURE RISKS

Lilian Coral, head of the Open Technology Institute at liberal think tank New America, said the CFPB's work was crucial, especially in the absence of privacy legislation around emerging technologies and the selling of data by data brokers.

"Gutting the CFPB in the short-term eliminates a voice and tool within the government to prevent companies' misuse of consumers' data," she said.

"In the long run, we know that the selling, breaching and misuse of data will continue to happen without legislation to ensure accountability. This will cost ordinary Americans billions of dollars," Coral said.

One former CFPB employee who was fired as part of the cull said consumers were at greater risk of falling victim to tactics used to trick or deceive them by feigning urgency or disguising advertising, known as 'dark patterns'.

The CFPB technologists were also investigating whether consumers received clear information on how new AI tools made decisions on, for example, approved mortgages or student loan repayments.

The former employee, who declined to be named, said the removal of the technologists would allow companies to escape oversight on how they build products and the tech involved.

"Without people who have a better chance of understanding the underlying technology ... I think the harms that could occur are amplified," they said.

"When they appear more noticeable, it could be too late."