Democrat-Requested GAO Report on CFPB Reorganization: What Are the Highlights?
The Government Accountability Office (GAO) has released a formal report, GAO-26-108448, documenting the reorganization efforts underway at the Consumer Financial Protection Bureau. The report covers the period from February through August 2025 and presents a factual timeline of what happened at the agency during that window.
GAO states clearly that it takes no position on the underlying policy questions. Its focus was on documenting dates and events.
For financial services companies subject to CFPB oversight, the report is worth understanding.
Keep in mind, the purpose of this piece is to highlight information expressly noted in the report so subsequent developments will be covered in other articles.
What GAO Was Asked to Do
The report was requested by ranking members of the Senate Banking Committee and the House Financial Services Committee (i.e., Elizabeth Warren and Maxine Waters, respectively). They asked GAO to review the effect of stop-work orders, workforce reductions, contract terminations, and other related actions on the CFPB’s ability to fulfill its statutory mandates.
The report covers the status of those efforts as of August 2025. GAO notes that a separate future report will examine the actual effects of these actions in greater depth.
What the Report Documents
GAO compiled its findings primarily from publicly available sources, including court filings, Federal Register notices, executive orders, and OPM/OMB memorandums. The CFPB declined to meet with auditors and did not respond to document requests, citing ongoing litigation.
The key events documented in the report include:
Stop-work orders: Beginning February 3, 2025, the acting director ordered staff to cease most work unless expressly approved. Staff emails reflected considerable uncertainty about what work was actually authorized.
Office closures: CFPB headquarters was closed February 10-14, and regional offices in Atlanta, Chicago, New York, and San Francisco had their leases terminated by GSA in February 2025.
Contract terminations: The chief legal officer directed termination of more than 175 contracts across six divisions. The DOGE website reported 348 CFPB contracts were modified or terminated, with a reported total value of approximately $1.4 billion. GAO noted it did not verify those numbers.
Workforce reductions: CFPB terminated 117 probationary employees in February 2025. A planned April 17 reduction in force (RIF) targeted 1,482 of approximately 1,689 staff, an 88% reduction overall. Individual divisions faced even steeper cuts: the Supervision Division at 90%, the Director’s Office at 94%, External Affairs at 95%, and the Office of the Director’s Financial Analysts at 100%. Courts repeatedly intervened, suspending the RIFs at various points.
Guidance and rules withdrawn: By August 18, 2025, CFPB had withdrawn or rescinded 67 guidance documents, including 7 interpretive rules, 8 policy statements, 13 advisory opinions, and 39 other guidance documents. The agency also withdrew 3 proposed rules and rescinded one final procedural rule.
Enforcement actions: Of 34 enforcement actions and 4 civil investigative demands active as of January 20, 2025, 19 were dismissed with prejudice by August 16, 2025. Only 9 remained ongoing. CFPB also sought to vacate or terminate a number of consent orders.
Supervision priorities: In April 2025, CFPB issued new supervision and enforcement priorities directing staff to move resources away from enforcement that states or other regulators could handle, reduce supervisory exams, and redirect supervisory focus from nonbanks to banks.
Funding reduced: The acting director requested $0 from the Federal Reserve for the third quarter of FY 2025. In July 2025, the One Big Beautiful Bill Act reduced CFPB’s statutory budget cap from 12 percent of Federal Reserve operating expenses to 6.5 percent.
DOGE involvement: Beginning February 7, 2025, a six-person DOGE team was detailed to the CFPB. DOGE detailees were given access to CFPB systems and data and participated in RIF determinations.
The Litigation Backdrop
The reorganization has been extensively litigated. Courts repeatedly blocked and then reinstated various personnel actions throughout the spring and summer of 2025. In August 2025, the D.C. Circuit vacated the district court’s injunction blocking the RIFs, but that order was itself vacated when the court granted rehearing en banc. Oral arguments were scheduled for February 24, 2026 and the legal picture remains unsettled. (Check out this recording of those arguments).
GAO’s Exchange with CFPB
CFPB pushed back on the report, submitting formal comments in September 2025 characterizing it as inaccurate and biased. However, CFPB did not identify specific factual errors or provide data to correct any supposed inaccuracies, again citing litigation constraints. GAO stood by its findings, noting that CFPB was given multiple opportunities to provide input and declined each time.
What Does This Mean for the Industry?
The GAO report does not resolve the legal or policy debate. What it purports to provide is a detailed, sourced chronology of what has already occurred.
For companies under CFPB supervision or enforcement, the reports indicates the following practical picture:
Many previously active enforcement cases have been dismissed or are being wound down
Supervisory examination activity has been dramatically reduced
Nonbank supervision has been deprioritized in favor of bank supervision
Prior regulatory guidance has been withdrawn
The agency’s budget and staffing have been cut to a fraction of prior levels
Whether these changes hold depends on many factors, including ongoing litigation, Congressional moves and the CFPB’s own next steps.
Bottom Line?
The CFPB looks very different today than it did at the start of 2025. The GAO report provides one attempt at a factual account of how quickly and extensively those changes have occurred.
For companies that are or have been subject to CFPB oversight, this is a moment to reassess compliance frameworks and strategies, including how to address a regulatory environment that continues to evolve may look quite different soon - including as states ramp up efforts and mid-terms approach.
Contact troy@garrishorn.com for more information.